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BUSINESS A25
Friday 15 April 2016
Wells Fargo 1Q earnings fall as oil loans hit bottom line
KEN SWEET The results topped Wall industrial loans in the quar- stress due to low prices and included a one-time $359
AP Business Writer Street expectations. The ter, more than double what excess leverage in this in- million tax benefit and
Wells Fargo’s first quarter average estimate of 12 it did a year earlier. dustry,” said Wells Fargo’s when excluded, earnings
results fell 6 percent from a analysts surveyed by Zacks Wells has some of the high- Chief Risk Officer Mike were relatively flat.
year ago, as the bank had Investment Research was est exposure to the strug- Loughlin in a statement. The bank originated $44 bil-
to set aside more money to for earnings of 98 cents per gling energy sector, with Wells Fargo’s consumer lion in home mortgages in
cover its struggling portfolio share. But its shares slipped more than half its outstand- banking division, its larg- the quarter, down from $54
of oil and gas loans. 14 cents to $48.90 in morn- ing loans to drilling and oil est business by revenue billion a year earlier.
The San Francisco-based ing trading. exploration companies. As and profit, once again had The biggest U.S. mortgage
bank said Thursday that it Wells Fargo’ results were energy prices have fallen, a relatively steady quar- lender posted revenue
had net income of $5.46 bil- impacted, like much of its these companies have ter. Earnings in the quar- of $22.2 billion in the pe-
lion, or 99 cents per share, competition, by its expo- struggled to pay back their ter were $3.3 billion, down riod, also surpassing Street
down from $5.8 billion, or sure to oil and gas loans. loans. from $3.54 billion from a forecasts. Five analysts sur-
$1.04 per share, in the same The bank charged off $273 “The oil and gas portfolio year earlier. veyed by Zacks expected
period a year earlier. million in commercial and remains under significant However last year’s results $21.57 billion.
Delta Air Lines’ 1Q profit up 27 percent on low fuel costs
DAVID KOENIG or1.4 percent, to $48.69 in ary, although they are still rope and the Zika virus in the quarter of last year.
AP Airlines Writer afternoon trading Thurs- about 60 percent below Western hemisphere could Delta said that excluding
DALLAS (AP) — Cheaper day. Shares of rivals Ameri- their June 2014 peak. weaken travel demand. a markdown in value for
jet fuel continues to give can Airlines Group Inc. — Labor costs are rising — Delta said last month’s its fuel-hedging contracts
airlines a lift, helping Delta rose 1 percent and United workers who made con- bombings that shut down and other one-time items
boost its first-quarter earn- Continental Holdings Inc. cessions during the trou- the Brussels airport cost it $5 it would have earned $1.32
ings by 27 percent to $946 per share.
million. People watch a landing Delta Air Lines jet approach the Narita International Airport from a popular That was slightly better than
The airline spent one-third viewing spot at Sakuranoyama Park in Narita, east of Tokyo. Delta Air Lines Inc. (DAL) on Thursday, Wall Street expected. Four-
less on fuel than it did a April 14, 2016, reported first-quarter profit. teen analysts surveyed by
year earlier, a savings of FactSet had forecast $1.30
more than $700 million. (AP Photo/Koji Sasahara) per share, and seven ana-
That offset higher spending lysts polled by Zacks Invest-
on labor, especially profit gained 1.4 percent. bled 2000s want raises and million in revenue. ment Research predicted
sharing for employees. There are, however, signs of profit sharing. Atlanta-based Delta Air $1.29. Revenue dipped 1
The news was not entirely turbulence ahead for the — Airfares have dropped, Lines Inc., the world’s sec- percent to $9.25 billion, just
rosy for Delta, however. carriers. especially on last-minute ond-biggest carrier by traf- below the $9.26 billion fore-
Revenue dipped 1 percent — Oil prices have soared business-travel tickets, as fic behind American Air- cast in the FactSet survey.
as passengers continued nearly 60 percent since airlines add flights. lines, earned $200 million Delta and its Delta Con-
to pay slightly less for every their lows in mid-Febru- — And terror attacks in Eu- more than it did in the first nection partners spent
mile they flew. The airline $1.39 billion on fuel, down
predicted that the closely 34 percent from the $2.10
watched per mile figure billion of a year earlier. La-
would decline again in the bor costs rose 10 percent or
second quarter, although $219 million, to $2.31 billion.
at a slower pace. Profit-sharing doubled to
The airline hinted Thurs- $272 million.
day that it could reduce The first quarter is usually a
planned flights this fall if the weak one for airlines; at-
revenue outlook doesn’t tention has already turned
improve enough. to the second and third
Delta is the first major U.S. quarters and the upcom-
airline to report first-quarter ing summer travel season.
earnings. The airlines have Investors will want to see
been setting profit records improvement in a key mea-
thanks to falling prices for surement of how much
jet fuel. passengers pay for every
Its shares rose 65 cents, mile they fly.
BP chief suffers shareholder revolt over $20M pay pack
DANICA KIRKA muneration report, which ised to review its remunera- make sure we understand Church of England also
Associated Press awarded Dudley a $19.6 tion policy ahead of next their concerns and return questioned the morality of
LONDON (AP) — British en- million pay package even year’s meeting. New pro- to seek your support for a such a rise, given that Brit-
ergy producer BP has suf- though the company ex- posals are expected to be renewed policy.” ain is undergoing a time of
fered a revolt by sharehold- perienced a drop in profit put forward for shareholder Aberdeen Asset Man- fiscal austerity.
ers who objected Thursday and planned thousands approval in 2017. agement, which man- Shares in BP fell almost 14
to increasing Chief Ex- of job cuts worldwide. But “We hear you,” Chairman ages more than 290 billion percent in 2015. Its earn-
ecutive Bob Dudley’s pay the vote was only advisory, Carl-Henric Svanberg said pounds ($411 billion), was ings plunged 91 percent in
package by 20 percent af- and merely registered dis- in excerpts released Thurs- among those complaining the fourth quarter, though
ter profit plunged last year. pleasure. day. BP’s award system was too much of that can be at-
Almost 60 percent of share- The company said it got “We will sit down with our complex. tributed to falling global oil
holders rejected the re- the message — and prom- largest shareholders to A representative from the prices.
