Finance

Wells Fargo WFC earnings Q1 2024

Published

6 months ago

April 13, 2024

Hightower’s Stephanie Link reacts to Wells Fargo's Q1 earnings

Wells Fargo on Friday reported first-quarter earnings and revenue that beat Wall Street expectations, despite a decline in net interest income.

Here’s how the company performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: $1.26 cents adjusted vs. $1.11 cents expected
Revenue: $20.86 billion vs. $20.20 billion expected

Shares of Wells traded flat Friday following the earnings report.

Wells said its net interest income, a key measure of what a bank makes on lending, decreased 8% in the quarter, due to the impact of higher interest rates on funding costs and a shift by customers to higher-yielding deposit products.

Net interest income for 2024 is expected to post a decline in the 7% to 9% range, unchanged from its prior guidance.

A woman walks past Wells Fargo bank in New York City, U.S., March 17, 2020.

Jeenah Moon | Reuters

The San Francisco-based bank saw net income decline to $4.62 billion, or $1.20 per share, from $4.99 billion, or $1.23 per share, a year earlier. Excluding a Federal Deposit Insurance Corp. charge of $284 million, or 6 cents per share, tied to the bank failures in 2023, Wells said it earned $1.26 per share, topping analyst estimates of $1.11 per share.

Revenue of $20.86 billion came in above the $20.20 billion estimate.

“Our solid first quarter results demonstrate the progress we continue to make to improve and diversify our financial performance,” Wells CEO Charlie Scharf said in a statement.

“The investments we are making across the franchise contributed to higher revenue versus the fourth quarter as an increase in noninterest income more than offset an expected decline in net interest income,” Scharf added.

For the latest period, the bank set aside $938 million as provision for credit losses. The bank said the provision included a decrease in the allowance for credit losses, driven by commercial real estate and auto loans.

Wells’ stock is up more than 15% year to date, beating the S&P 500’s 9% return.

The bank repurchased 112.5 million shares, or $6.1 billion, of common stock in first quarter.

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Finance

China’s Alibaba claims AI translation tool beats Google, ChatGPT

Published

8 hours ago

October 16, 2024

Business Finance News

Chinese e-commerce company Alibaba has invested heavily in its fast-growing international business as growth slows for its China-focused Taobao and Tmall business.

Nurphoto | Nurphoto | Getty Images

BEIJING — Chinese e-commerce giant Alibaba‘s international arm on Wednesday launched an updated version of its artificial intelligence-powered translation tool that, it says, is better than products offered by Google, DeepL and ChatGPT.

That’s based on an assessment of Alibaba International’s new model, Marco MT, by translation benchmark framework Flores, the Chinese company said.

Alibaba’s fast-growing international unit released the AI translation product as an update to one unveiled about a year ago, which it says already has 500,000 merchant users. Sellers based in one country can use the translation tool to create product pages in the language of the target market.

The new version is based only on large language models, allowing it to draw on contextual clues such as culture or industry-specific terms, Kaifu Zhang, vice president of Alibaba International Digital Commerce Group and head of the business’ artificial intelligence initiative, told CNBC in an interview Tuesday.

“The idea is that we want this AI tool to help the bottom line of the merchants, because if the merchants are doing well, the platform will be doing well,” he said.

Large language models power artificial intelligence applications such as OpenAI’s ChatGPT, which can also translate text. The models, trained on massive amounts of data, can generate humanlike responses to user prompts.

Alibaba’s translation tool is based on its own model called Qwen. The product supports 15 languages: Arabic, Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Turkish and Ukrainian.

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Zhang said he expects “substantial demand” for the tool from Europe and the Americas. He also expects emerging markets to be a significant area of use.

When users of Alibaba.com — a site for suppliers to sell to businesses — are categorized by country, developing countries account for about half of the top 20 active AI tool users, Zhang said.

Chinese companies have increasingly looked abroad for growth opportunities, especially e-commerce merchants. PDD Holdings‘ Temu, fast fashion seller Shein and ByteDance’s TikTok are among the recent global market entrants. Many China-based merchants also sell on Amazon.com.

Contextual clues

Since Alibaba launched the first version of its AI translation tool last fall, the company said merchants have used it for more than 100 million product listings. Similar to other AI-based services, the basic pricing charges merchants by the amount of translated text.

Zhang declined to share how much the updated version would cost. He said it was included in some service bundles for merchants wanting simple exposure to overseas users.

His thinking is that contextual translation makes it much more likely that consumers decide to buy. He shared an example in which a colloquial Chinese description for a slipper would have turned off English-speaking consumers if it was only translated literally, without getting at the implied meaning.

“The updated translation engine is going to make Double 11 a better experience for consumers because of more authentic expression,” Zhang said, in reference to the Alibaba-led shopping festival that centers on Nov. 11 each year.

Alibaba’s international business includes platforms such as AliExpress and Lazada, which primarily targets Southeast Asia. The international unit reported sales growth of 32% to $4.03 billion in the quarter ended June from a year ago.

That’s in contrast to a 1% year-on-year drop in sales to $15.6 billion for Alibaba’s main Taobao and Tmall e-commerce business, which has focused on China.

The Taobao app is also popular with consumers in Singapore. In September, the app launched an AI-powered English version for users in the country.

Nomura analysts expect that Alibaba’s international revenue slowed slightly to 29% year-on-year growth in the quarter ended September, while operating losses narrowed, according to an Oct. 10 report. Alibaba has yet to announce when it will release quarterly earnings.