Wells Fargo Earnings Jump 20% in 3rd Quarter
Wells Fargo & Co.’s earnings jumped a better-than-expected 20% in the third quarter as the ninth-largest U.S. bank benefited from sustained domestic economic expansion and lower costs.
Chase Manhattan Corp., the nation’s second-largest bank, said its third-quarter earnings fell but less than expected, as a strong domestic economy helped temper the loss of revenue from overseas markets.
San Francisco-based Wells, in its last earnings report before being acquired by Norwest Corp., posted net income of $347 million, or $3.99 a share, up from $290 million, or $3.23, a year ago. The average forecast on Wall Street was $3.93 a share.
Wells said its net interest income rose 1.8% and non-interest income rose 8.9%, boosted by service charges on deposits and higher fees and commission income.
Mellon Bank Corp., which like Wells focuses primarily on domestic activity, met expectations with a 14% jump in operating income to $218 million, or 82 cents a share, as trust and investment fees jumped 14%. Mellon, the nation’s largest bank manager of mutual funds, said non-interest revenue rose 12%.
Chase cited trading losses and declines in equity investments for its 32% drop in earnings to $738 million, or 82 cents a share. The results beat estimates by five cents.
Chase’s non-interest revenue fell 6%. Total trading-related revenue fell 60% to $259 million as the bank lost $146 million from trading in bonds.
Chase’s consumer businesses gained, with revenue from card-member services rising 17% and regional consumer banking increasing 5%.
Chase said it has $200 million of unsecured trading and lending business in Russia and a $2.7 billion hedge fund investment, of which only $300 million is unprotected.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
DRUG MAKERS:
* American Home Products Corp. said higher sales of its hormone-replacement therapy Premarin helped boost third-quarter net income 12% to $619 million, or 46 cents a share, meeting forecasts. Sales fell 7% to $3.22 billion.
* Bristol-Myers Squibb Co.’s profit rose 13% to $966 million, or 95 cents a share, matching forecasts, after it introduced a new hypertension drug this year and boosted sales of a cholesterol-reducer. Bristol-Myers said sales rose 9% to $4.52 billion.
* Schering-Plough Corp.’s earnings rose 22% to $432 million, or 58 cents, a penny higher than estimates, as sales of its top product, widely advertised allergy drug Claritin, jumped 42% to $635 million. Total sales rose 16% to $1.99 billion.
* SmithKline Beecham said its pretax profit rose a greater-than-expected 8% to $665 million as stronger sales of new prescription drugs offset flat sales of over-the-counter medicines. The British company’s sales rose 6.5% to $3.3 billion.
OTHER INDUSTRIES::
* Cargill Inc. said profit in its fiscal first quarter tumbled 96% to $4 million as the grain and food-processor was squeezed by weaker demand in Asia and losses in Russia. Cargill, the largest closely held U.S. company, didn’t release sales.
* Northwest Airlines Corp. reported an unexpectedly large loss of $224 million, or $2.91 a share, in the third quarter, compared with a profit of $290 million, or $2.53, a year ago. The carrier was shut down for 15 days last month by a pilots strike, which cost the company $630 million before taxes. Analysts were expecting a loss of $1.12. Revenue dropped 31% to $1.93 billion.
