The company reported net income of $6.2 Billion for the second quarter of 2019 which surpassed markedly the $5.2 Billion that was reported for the same period last year. The diluted earnings per share reached $1.30 compared to the $0.98 for Q2 2018.
Despite that, the share price of the company’s stock fell significantly with 3 per cents in yesterday’s trading session because of higher incurred tax charges and smaller net interest income.
“Net interest income in the second quarter was $12.1 billion, down $216 million from first quarter 2019, driven by balance sheet mix and repricing, including the impacts of higher deposit costs and the lower interest rate environment. […] The Company’s effective income tax rate was 17.3% for second quarter 2019. The effective income tax rate in first quarter 2019 was 13.1% and included net discrete income tax benefits of $297 million related mostly to the results of U.S. federal and state income tax examinations and the accounting for stock compensation activity.” [source]
Overall, this is the second consecutive earnings report for the company that ends with a better-than-expected net income data, and also bigger revenue streams, but the final performance in the stock market being ultimately thwarted by disappointing net interest income. On the 12th of April, the share price dipped with 2.62 per cent for the same reason after the Q1 earnings data had been released. You can find more information about Wells Fargo’s last earnings report here.
Thus, Wells Fargo & Company’s stock tumbled with 1.41 dollars in yesterday’s trading session, which amounted to a total of 3.02 per cent decline, and as a result, the market sentiment surrounding the share price is looking increasingly bearish.
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