Wells Fargo Expects Record 1Q Earnings

Wells Fargo & Co. (WFC) expects record first-quarter earnings of $3 billion, or 55 cents per share. Analysts on average expected earnings of 24 cents per share.

Investors have welcomed the positive surprise and the stock has already surged more than 21% today amid higher-than-usual volume of almost 210 million, compared to the average of 163.9 million.

The nation’s second-largest home lender expects revenues to grow 16% year-over-year to $20 billion during the quarter.

Wells Fargo also stated that Wachovia Corp, which the former acquired for $12.5 billion, has performed better than expected.

The US bank, which received $25 billion in bailout funds, lowered the quarterly dividend last month by 85% to 5 cents a share in an effort to save $5 billion annually.

Although analysts have pulled back on earnings estimates for this year by 13 cents over the past week, today’s positive surprise could lift their expectations over the next several weeks.

Wells Fargo is a Zacks #3 Rank (”Hold”) stock.

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