US banking giant Wells Fargo projected on Thursday a “record” US$3 billion profit in the first quarter, sparking hopes of recovery from a financial crisis that is battering the economy.
The bank said “it expects to report record net income of approximately US$3 billion for first quarter of 2009,” thanks in part to a stronger than anticipated performance by its new unit Wachovia.
Wells Fargo also said it expects earnings per share of about US$0.55, much better than analysts’ consensus forecast of US$0.23.
MOMENTUM
“Our business momentum is strong, and we expect our operating margins to remain at the top of our peer group,” Wells Fargo chief executive John Stumpf said.
The upbeat guidance sent Wells Fargo shares flying, lifting other major banks with it and producing a powerful Wall Street rally that capped a holiday-shortened week. The market was closed yesterday.
Wells Fargo soared 31.70 percent to US$19.61 while Bank of America was up 35.27 percent to US$9.55 and Citigroup by 12.59 percent to US$3.04.
“Investors, always concerned about the banks and whether they are beginning to recover, should get a boost today from Wells Fargo,” said Frederic Dickson, chief market strategist of DA Davidson & Co.
Briefing.com analysts said in a client note that Wells Fargo “raises the bar for its peers” and provides leadership to the broader market “as many investors hold to the notion that a broader market recovery will come on the back of a rally in financials.”
‘HOPEFUL SIGN’
Investors see the Wells Fargo outlook “as a hopeful sign that the sector is turning the corner from the worst of times,” Briefing’s Patrick O’Hare said.
Also lifting sentiment on the sector was a New York Times report that all 19 banks, including Wells Fargo, would pass federal regulators’ ongoing “stress test” about their viability, citing officials involved in the examinations.
Wells Fargo said it expected revenue to climb 16 percent in the first quarter to US$20 billion, with 40 percent of the increase due to sales from its newly acquired Wachovia bank.
“Wachovia’s outstanding franchise has proven to be everything we thought it would be when we announced this acquisition and the financial contribution from Wachovia exceeded our expectations in the first quarter,” Stumpf said.
Wells Fargo’s cautious management has left the bank relatively unscathed in the collapse of the real-estate boom that began in 2006. For the full year last year, Wells Fargo had posted profit of US$2.84 billion, a drop of 65 percent.
The company will report its first-quarter financial results on April 22.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique