After dropping yesterday, Wells Fargo (WFC) stock is up nearly 2.5% in the pre-market. Yesterday’s fall is attributed to the unexpected .4 billion loss reported in the second quarter.Wells Fargo & Co (NYSE: WFC) stock saw an increase in volatility as investors scrambled to liquidate their holdings after the company reported poor than anticipated second-quarter results. The shares dropped by 4.57% to end the day trading at .25, however, they have been recovering in the pre-market to trade around .90 (+2.68%).For the better part of this year, WFC stock has been on a losing streak due to the coronavirus crisis. According to MarketWatch market data, WFC stock has dropped 46.36% in the past one year, dropped 54.93% YTD, dropped another 14.73% in the past three months, another 11.66% in
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After dropping yesterday, Wells Fargo (WFC) stock is up nearly 2.5% in the pre-market. Yesterday’s fall is attributed to the unexpected $2.4 billion loss reported in the second quarter.
Wells Fargo & Co (NYSE: WFC) stock saw an increase in volatility as investors scrambled to liquidate their holdings after the company reported poor than anticipated second-quarter results. The shares dropped by 4.57% to end the day trading at $24.25, however, they have been recovering in the pre-market to trade around $24.90 (+2.68%).
For the better part of this year, WFC stock has been on a losing streak due to the coronavirus crisis. According to MarketWatch market data, WFC stock has dropped 46.36% in the past one year, dropped 54.93% YTD, dropped another 14.73% in the past three months, another 11.66% in the past month, besides 1.22% in the past 5 days.
The poor performance is keeping short term stock market investors at bay, hence lacking fuel to push higher. However, there seem to be long term investors who still believe in the ability of the bank to deliver post COVID-19.
Wells Fargo Poor Second Quarter Report That Affects WFC Stock
On Tuesday, the company revealed its Q2 financial report, which came out as a shock to many. In that period, the company recorded the poorest figures in the past decade, presumably due to the economic downtime.
“We are extremely disappointed in both our second quarter results and our intent to reduce our dividend,” CEO Charlie Scharf said in the release. “Our view of the length and severity of the economic downturn has deteriorated considerably from the assumptions used last quarter, which drove the $8.4 billion addition to our credit loss reserve in the second quarter.”
According to the report, it recorded a net loss of $2.38 billion, or 66 cents per diluted share, for the second quarter of 2020.
In addition, the bank announced a third-quarter dividend cut to 10 cents per share from 51 cents per share. The cut was larger than anticipated by analysts, whereby they had given a cut of 16 cents per share.
Revenue collected during the second quarter came in at $17.8 billion, which was a significant drop from the prior year’s similar quarter at $21.6 billion.
Notably, the net interest income was $9.88 billion, down $2.2 billion on year, while non-interest income was $8 billion, down $1.5 billion.
However, on the brighter side, the company reported Average Loans at $971.3 billion in the second quarter, up $6.2 billion from the first quarter. On the other hand, it’s period-end loan balances were $935.2 billion as of June 30, down $74.7 billion from March 31.
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