U.S. Bancorp (NYSE: USB) and Wells Fargo (NYSE: WFC), two of the nation’s largest banks, are set to release their earnings on Wednesday coming on the heels of mixed earnings reports from JP Morgan Chase and Bank of America last week.
Last week investors saw JP Morgan Chase (NYSE: JPM) release far better than expected earnings based on various investments that it had made, but the bank admitted that it likely has another $2 billion worth of loans that will likely default and set aside a major chunk of its earnings to account for those losses.
Bank of America’s earnings report painted a much grimmer picture of the state of the banking industry. B of A announced on Friday that they had a net loss of $1 billion during the third quarter of 2009. As part of its earnings release, Bank of America set aside a record $11.7 billion to cover future loan losses. Bank of America’s disappointing results resulted in a 4.6% decrease in share value throughout the day.
Business Week has averaged various analysts’ predictions for U.S. Bancorp. The consensus is that U.S. Bancorp will see a $0.27 per share earnings announcement.
Although investors are optimistic that both companies will turn a profit in Q3, U.S. Bancorp’s earnings will likely be 5 cents per share less than they were during Q3 2009 versus Q3 2008. Wells Fargo’s earnings per share will likely be 11 cents less than they were during Q3 2008.
