Wells Fargo Beats Earnings Estimates While JP Morgan Falters

Jacob Harper  |

As the first earnings season of 2014 kicks into full gear, one of the largest financial institutions in America reported numbers that far exceeded expectations, indicating that the turnaround for the banking sector is possibly more robust than the already optimistic projections.

Wells Fargo & Co (WFC) reported fourth quarter and full year earnings on Jan 14, posting an uptick of 10 percent over the same period in the year prior. Their numbers stand in contrast to those posted by scandal-ridden JP Morgan Chase & Co. (JPM) , who suffered billions in expenses in conjunction with myriad improprieties.  

While JP Morgan still dwarfs Wells Fargo in size, with only $1.5 trillion in assets to JP Morgan’s $2.4 trillion, Wells Fargo enjoys a relatively squeaky reputation compared to their competitor, and has avoided both the regulatory scrutiny and massive fines heaped on JP Morgan.

In the last 12 months, JP Morgan shelled out over $20 billion in fines and settlements for improprieties ranging from securities fraud to bribery to energy price fixing. The costs in the fourth quarter alone accounted for a $0.27 per-share loss for JP Morgan.

Wells Fargo Sees Revenues Slide, But Profit Increases

For their fourth quarter 2013 earnings report, Wells Fargo reported a net gain of $5.6 billion, or $1.00 per share, versus the net profit of $5.06 billion, or $0.91 per share, from the same period a year ago. Revenue for the quarter was $20.7 billion, as compared to $22 billion from the previous year. Analysts were expecting a profit of $0.98 per share on revenues of $31.62 billion.

Wells Fargo's reported profit for FY 2013 was $21.9 billion, a 16 percent increase from FY 2012.

JP Morgan’s Slightly Beats Revenue Yet Profit Drops 7.3 Percent

For their fourth quarter 2013 earnings report, JP Morgan reported a net gain of $5.28 billion, or $1.30 per share, versus the net profit of $5.7 billion, or $1.39 per share, from the same period a year ago. Revenue for the quarter was $24.1 billion, as compared to $24.3 billion from the previous year. Analysts were expecting a profit of $1.35 per share on revenues of $24.083 billion.

JP Morgan's reported profit for FY 2013 was $17.9 billion, compared to $21.3 billion the previous year, representing a 16 percent decrease.

Following their respective earnings reports, by midday trading on Jan 13 both JP Morgan and Wells Fargo were flat. Wells Fargo was unchanged at $45.56 a share, and JP Morgan gained .07 percent to hit $57.74, as the heavy regulatory fines had already been factored in by the market.

 

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Companies

Symbol Name Price Change % Volume
WFC Wells Fargo & Company 46.52 -0.09 -0.19 26,740,046 Trade
JPM JP Morgan Chase & Co. 98.54 -0.47 -0.47 20,837,231 Trade

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