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Wells Fargo (NYSE: WFC) continues to be an oasis in a desert of less-than-impressive bank earnings.
The company reported second-quarter earnings of $4.6 billion – a company record and 17% higher than over the same three-month period a year ago. That comes on the heels of a 13% year-over-year earnings improvement in the first quarter and a 20% year-to-year jump in the fourth quarter of 2011.
No wonder the fourth-largest bank in the U.S. has managed to grow its profits each of the past three years.
Wells Fargo’s latest stellar earnings report boosted shares more than 3% today, pushing the stock to within a dollar of its 52-week high. Despite trading at the end of its range, Wells Fargo’s shares remain relatively cheap at just 11.6 times earnings.
Wells Fargo’s string of quarterly earnings growth is all the more impressive considering the underwhelming performances of its peers. None of the five other major U.S. banks posted first-quarter earnings that outpaced the previous year.
JPMorgan Chase (NYSE: JPM) – the only other big bank to report second-quarter earnings so far – revealed more than $4 billion in trading losses in its announcement.
All six big banks managed to beat earnings estimates last quarter, however – as did JPMorgan this morning. That’s a testament to just how low expectations are for financials even three years removed from the depths of the recession.
We’ll see next week whether they can keep up the winning streak. The four remaining big banks all report their quarterly profits.
It’s doubtful any of them will match the meaningful earnings growth Wells Fargo just posted.