Wells Fargo down 3.5% after reporting slight miss on quarterly revenues

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Last Update: 12-Oct-12 09:50 ET

Wells Fargo (WFC $33.90 -1.29) reported third quarter earnings of $0.88 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.87. Revenues rose 8.0% year over year to $21.2 billion versus the $21.42 billion consensus. Net interest income was $10.7 billion in third quarter, down from $11.0 billion in second quarter 2012. The decline in net interest income was largely driven by lower income from variable sources, such as fee income and purchased credit-impaired (PCI) loan resolutions which were elevated in the second quarter. Noninterest income was $10.6 billion, up from $10.3 billion in second quarter 2012. The increase was driven by a $252 million increase in market sensitive revenue, primarily trading gains including deferred compensation plan investments offset in employee benefits expense. Noninterest expense declined $285 million in the quarter to $12.1 billion, compared with $12.4 billion in second quarter 2012. The decline in noninterest expense was due primarily to $243 million of lower operating losses, $112 million of seasonally lower insurance commissions, $104 million of lower severance expense, and our third consecutive quarterly reduction in foreclosed asset expense, down $42 million from prior quarter.