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.
Taiwanese actress Barbie Hsu (徐熙媛) has died of pneumonia at the age of 48 while on a trip to Japan, where she contracted influenza during the Lunar New Year holiday, her sister confirmed today through an agent. "Our whole family came to Japan for a trip, and my dearest and most kindhearted sister Barbie Hsu died of influenza-induced pneumonia and unfortunately left us," Hsu's sister and talk show hostess Dee Hsu (徐熙娣) said. "I was grateful to be her sister in this life and that we got to care for and spend time with each other. I will always be grateful to
REMINDER: Of the 6.78 million doses of flu vaccine Taiwan purchased for this flu season, about 200,000 are still available, an official said, following Big S’ death As news broke of the death of Taiwanese actress and singer Barbie Hsu (徐熙媛), also known as Big S (大S), from severe flu complications, the Centers for Disease Control (CDC) and doctors yesterday urged people at high risk to get vaccinated and be alert to signs of severe illness. Hsu’s family yesterday confirmed that the actress died on a family holiday in Japan due to pneumonia during the Lunar New Year holiday. CDC Deputy Director-General Tseng Shu-hui (曾淑慧) told an impromptu news conference that hospital visits for flu-like illnesses from Jan. 19 to Jan. 25 reached 162,352 — the highest
COMBINING FORCES: The 66th Marine Brigade would support the 202nd Military Police Command in its defense of Taipei against ‘decapitation strikes,’ a source said The Marine Corps has deployed more than 100 soldiers and officers of the 66th Marine Brigade to Taipei International Airport (Songshan airport) as part of an effort to bolster defenses around the capital, a source with knowledge of the matter said yesterday. Two weeks ago, a military source said that the Ministry of National Defense ordered the Marine Corps to increase soldier deployments in the Taipei area. The 66th Marine Brigade has been tasked with protecting key areas in Taipei, with the 202nd Military Police Command also continuing to defend the capital. That came after a 2017 decision by the ministry to station
PETITIONS: A Democratic Progressive Party official quoted President William Lai as saying that civil society groups are organizing the recall drives at the grassroots level Some civil society groups yesterday announced that they have collected enough signatures to pass the first-stage threshold to initiate a recall vote against Chinese Nationalist Party (KMT) legislators in 18 constituencies nationwide, saying that they would submit the signatures to the Central Election Commission (CEC) today. They also said that they expected to pass the threshold in eight more constituencies in the coming days, meaning the number of KMT legislators facing a recall vote could reach 26. The groups set up stations to collect signatures at local marketplaces and busy commercial districts. The legislators their petition drives target include Fu