Before the bell on Friday financial services giant Wells Fargo & Company (WFC) released its fourth-quarter earnings report, showing a rise n profit, beating analysts expectations, as the bank benefited from its mortgage business.
The San Francisco, California-based company saw its fourth-quarter net income rise +24% to a record $5.09 billion, or 91 cents per share, up from $4.11 billion, or 73 cent per share, in the year ago period. Wall Street analysts were expecting Wells Fargo to earn 89 cents per share according to Bloomberg.
Revenue came in to be $21.9 billion, beating the analyst consensus of $21.3 billion.
The company benefited from a refinancing boom in the quarter, helping mortgage lenders originate $511 billion. Mortgage originations hit $1.75 trillion for 2012, with 71% of those loans driven by refinancing as interest rates hit record lows.
Looking ahead, Wells Fargo might be negatively affected by recent regulatory measures. The recent news that the Federal Reserve might end its bond buying policy in 2013 also worries the bank and investors as it will put a strain on profits.
Wells Fargo shares were down 52 cents, or -1.47%, during premarket trading on Friday. The stock is up +22.32% over the past year.
The Bottom Line
Shares of Wells Fargo (WFC) have a 2.49% dividend yield, based on last night’s closing stock price of $35.40. The stock has technical support in the $32-$33 price area. If the shares can firm up, we see overhead resistance around the $36-$39 price levels.
Wells Fargo & Company (WFC) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.