Wells Fargo fourth-quarter profit drops 50% as legal fees, low interest rates weigh on results

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Wells Fargo is scheduled to report fourth-quarter earnings before the market open Tuesday.

Here’s what Wall Street expects, according to Refinitiv consensus estimates:

  • Earnings: $1.12 per share, down 7.2% year over year
  • Revenue: $20.14 billion, down 4% year over year

The results, which reflect the bank’s performance for the three months ended Dec. 31, mark Wells Fargo’s first quarter under new management. Charles Scharf took over as Wells Fargo’s chief executive in October, replacing Tim Sloan and charged with navigating the bank through a host of regulatory issues that have kept costs elevated.

Shares of Wells Fargo are up just 7.6% over the last 12 months compared to 33% at Bank of America and 36.9% at Citigroup.

Investors and analysts alike also hope Scharf can bring to Wells Fargo the success he oversaw at BNY Mellon, where he previously served as CEO and helped upgrade its technologies.

“Charlie’s first earnings call is tomorrow. I think there is a lot of focus on expenses — they’re clearly running a lot higher there than at peers,” said Barclays analyst Jason Goldberg on Monday. “And I think the question is when can they start to bring down those costs and how far are behind are they — if at all — on their technology spend.”

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