Wells re­ports mixed re­sults for quar­ter

San Francisco Chronicle Late Edition - - BUSINESS - By James Ru­fus Koren James Ru­fus Koren is a Los An­ge­les Times writer.

Wells Fargo & Co. re­ported mixed earn­ings Fri­day, with bet­ter-thanex­pected rev­enue but profit that fell short of an­a­lysts’ ex­pec­ta­tions.

The San Fran­cisco bank was one of three ma­jor U.S. banks to re­port earn­ings, and in­vestors are watch­ing the banks closely for signs about the health of the econ­omy amid a week of stock mar­ket tur­bu­lence lead­ing up to this quar­ter’s earn­ings sea­son.

Com­peti­tors JPMor­gan Chase & Co. and Cit­i­group Inc. both re­ported re­sults that topped Wall Street es­ti­mates.

Wells Fargo re­ported third-quar­ter rev­enue of $21.9 bil­lion, top­ping an­a­lysts’ pre­dicted rev­enue of $21.8 bil­lion, which was in line with last year’s third quar­ter. But the bank’s earn­ings per share of $1.13, a marked im­prove­ment over the same quar­ter last year, didn’t meet ex­pec­ta­tions. An­a­lysts sur­veyed by data provider Fac­tSet had ex­pected earn­ings of $1.19 per share

The bank’s profit — which to­taled $6 bil­lion, up 32 per­cent over last year’s third quar­ter — was boosted by cost cut­ting and lower cor­po­rate taxes due to the GOP tax cuts. Wells Fargo shut­tered 88 branches in the third quar­ter alone and has closed or sold more than 250 over the past year.

The bank, which con­tin­ues to deal with the fall­out from a se­ries of scan­dals stem­ming from cus­tomer abuses, is op­er­at­ing un­der an as­set cap man­dated ear­lier this year by the Fed­eral Re­serve. CEO Tim Sloan said Fri­day he ex­pects the bank to con­tinue op­er­at­ing into next year un­der the cap, which lim­its the bank’s growth while it im­proves its cor­po­rate gov­er­nance.

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