Wells Fargo issued guidance today predicted a profit of $3 Billion for 1Q 2009. They will report their full results later this month.
Spoiler :
NEW YORK (CNNMoney.com) -- Wells Fargo delivered a much-needed bit of good news for the banking sector Thursday, saying it expected to book a better-than-expected profit of approximately $3 billion in the most recent quarter.
The announcement not only sent Wells Fargo (WFC, Fortune 500) stock 25% higher in midday trading, but boosted shares of many other big banks as investors bet that Wells' peers may also post results that exceed Wall Street's estimates. Bank of America (BAC, Fortune 500), which will report its results on April 20, gained 30%.
Originally slated to deliver its results later this month, the San Francisco-based Wells Fargo issued guidance for the first quarter, saying it expected to report a record profit of about $3 billion, or 55 cents per common share. Expectations are for the company to book a profit of 28 cents a share, according to Thomson Reuters.
"Our business momentum is strong, and we expect our operating margins to remain at the top of our peer group," Wells Fargo CEO John Stumpf said in a statement.
Wells Fargo attributed the strong results to healthy lending margins driven by lower interest rates, fewer additional costs related to its purchase of Wachovia and a boom in mortgage activity.
Mortgage applications surged during the quarter, with the company reporting $83 billion in applications during the month of March alone.
Their only quarterly loss was last quarter, losing $2.7 Billion.
Wells Fargo seems to be by far the healthiest of the big banks, being the only bank to maintain a AAA rating by the S&P and having profited $2.6 Billion for the full year 2008. Hopefully they aren't blowing smoke out of their ass, and the other big banks report positive results as well!
The beauty of accounting! Write off Wachovia loan losses one quarter so you have the worst quarter ever, and then come out the other side with the best ever.
The truly nauseating part of this whole situation is that there is a distinct desire and complete mental shift by some people that mortgages and banks (and all the small parts that make those up) are the only things that matter right in regards to economic health. Once the banks are better the economy will follow suit...or not.