Earnings at Wells Fargo (WFC) Beat the Street But Continue to Decline YoY

Wells Fargo & Company (NYSE: WFC) said Wednesday that its quarterly profit jumped 20 percent from last quarter, as the firm was able to temper loan losses to boost its bottom line results. Still, Wells Fargo could not manage to post year-over-year growth.

The fourth largest U.S. bank reported second-quarter earnings of $3.06 billion or 55 cents per share, down slightly from $3.17 billion or 57 cents per share earned in the same quarter last year.

Revenue fell to $21.39 billion in the three month period ended June 30 from $22.51 last year.

On average, analysts had been looking for earnings of 48 cents per share and revenue that was in line with the firm’s results.

"We believe credit quality has indeed turned the corner," said Chief Financial Officer Howard Atkins in a statement. "And we expect this positive trend will continue over the coming year."

Well Fargo said that it saw permanent losses from bad loans decline by 16 percent from the previous quarter to $4.5 billion, while the bank also saw a $626 million boost from its complex hedging positions on mortgage-backed securities in the quarter.

"Over the course of the quarter, our 278,000 team members focused steadfastly on serving customers, generating strong earnings performance across our diverse lines of business and increasing market share across many of our businesses,” said Chairman and CEO John Stumpf. “We also made strong progress in the successful integration of Wachovia. We have completed approximately half of the integration process, as we prepare to convert our eastern markets to Wells Fargo beginning in the fall."

UPDATE: Click here to see some highlights from Wells Fargo's Q2 conference call.

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