Inside Financial Services

The Limited Utilityof Quarterly Conference Calls

Wells didn't hold them? So what? Calls are often more trouble than they're worth.

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I can’t help but laugh and shake my head when I read that analysts complain about what they consider to be

the opaque culture of Wells [Fargo], which has a history of limited disclosures. Analysts had long complained that the San Francisco bank didn’t hold live quarterly earnings conference calls. Instead, [company executives] prerecorded statements. . . .

Let’s step out of the weeds for a moment, shall we? I enjoy reading conference call transcripts as much as anyone. But if you think that conducting quarterly earnings calls is the sine qua non of corporate transparency, you really ought to be in a different line of work. More than anything, the calls are an occasion for sell-side analysts to either a) do some extended telephonic preening in front of their peers, or b) ask dumb questions. I’ve long told bank CEOs that the calls tend to cause more confusion than they clear up. As to Wells Fargo in particular, the company is a model of clarity among the big banks simply because its business is more focused and easier to understand than anyone else’s. Or, to put it another way, if you’re a bank investor, which company do you think is more likely to provide, out of the blue, a stock-imploding surprise piece of bad news: Wells Fargo or Citigroup? Citi’s quarterly conference calls, I hasten to add, are reliably lengthy and meticulous. Take your time in answering the question. . . .

What do you think? Let me know!

14 Responses to “The Limited Utilityof Quarterly Conference Calls”

  1. Paranoid?

    Long time CFO abruptly retires, and they are having trouble paying retention bonuses to WB brokers. Serious money was promised to be paid in September, and it is still “in the works.” It makes me worried, 2 red flags.

  2. Mike Perry - Return that bankstocks award!

    Feb. 11 (Bloomberg) — IndyMac Bancorp former Chief Executive Officer Michael W. Perry and two former chief financial officers at the company were sued by the U.S. Securities and Exchange Commission for misleading disclosures about the company’s financial stability, the agency said in an e-mailed statement.

  3. Dr. Roberts

    One thought perhaps you would have taken this opportunity to comment on the “abrupt” departure of long time CFO Howard Atkins.

  4. Dr. Roberts

    One thought perhaps you would have taken this opportunity to comment on the “abrupt” departure of long time CFO Howard Atkins.

  5. Walter Wriston

    Wall Street exists to separate fools from their money. Of course, quarterly conference calls are stupid– just as quarterly earnings estimates are idiotic and quarterly earnings reporting is dumb.

    “Nobody ever lost money by underestimating the taste or intelligence of the American public.”
    – H.L. Mencken

  6. Brian H

    The point at which I hang up is usually when the sixth analyst has asked, in a slightly different way from the prior five, what next quarters numbers are expected to be.

  7. Bill

    Oh, please stop baying about the “sudden” departure of Howie. For God’s sake, no one complained like this when Rodney Jacobs left the company, and he had been at WFC since the Crocker Bank days. He was as much to credit(blame) for refusing to cow tow to the annoying and stupid questions of Wall Street fag hags.

  8. cwood

    i’m in total agreement , tom .
    respectfully ,
    craig woodruff

  9. galdc

    I totally agree with you on the lack of value of conference calls for the sell side. Truly, the only ones who benefit from conference calls are buyside analysts at small firms who do not have the knowledge and/or confidence to call the IR directly. Any sell side or senior buy side analyst who would be willing to ask a truly penetrating or insightful question on a conference call has already established his/her position and is memrely trying to get others to think the same way.

  10. jay

    I was a senior at Wells Fargo for 12 years, left voluntary because of an eventual lack of confidence, and now am happily at Citi. The upside at the later far outweighs any upside at the former. The domestic focus of WFC has limited potential especially if QE2 fails the US economy. I left WFC because the Wachovia merger was shockingly rushed, the due diligence was flawed, and there’s a Rubic’s cube of purchase accounting and loan mod’s going on in the WFC mortgage portfolio that are masking the credit quality issues. Do your homework. The Berkshire Hathaway purchase of add’l WFC stock and simultaneous dumping of BAC last week was entirely designed to mollify the Atkin’s departure announcement and that seemed to work in the short term to buffer the decline in the stock price. I know Howard Atkins and he is exceedingly bright & absolutely above board. I also know Stumpf, an intellectual light weight and appointed “front man”, and there’s no comparison. Howard would not leave the company to have Tim Sloan, another junior weight who tows the company line , to sign the 2010 SOX if there wasn’t a serious dispute of strategy and approach at hand. Something on that balance sheet is ticking. Good luck.

  11. jay

    I was a senior at Wells Fargo for 12 years, left voluntary because of an eventual lack of confidence, and now am happily at Citi. The upside at the later far outweighs any upside at the former. The domestic focus of WFC has limited potential especially if QE2 fails the US economy. I left WFC because the Wachovia merger was shockingly rushed, the due diligence was flawed, and there’s a Rubic’s cube of purchase accounting and loan mod’s going on in the WFC mortgage portfolio that are masking the credit quality issues. Do your homework. The Berkshire Hathaway purchase of add’l WFC stock and simultaneous dumping of BAC last week was entirely designed to mollify the Atkin’s departure announcement and that seemed to work in the short term to buffer the decline in the stock price. I know Howard Atkins and he is exceedingly bright & absolutely above board. I also know Stumpf, an intellectual light weight and appointed “front man”, and there’s no comparison. Howard would not leave the company to have Tim Sloan, another junior weight who tows the company line , to sign the 2010 SOX if there wasn’t a serious dispute of strategy and approach at hand. Something on that balance sheet is ticking. Good luck.

  12. jay

    I was a senior at Wells Fargo for 12 years, left voluntary because of an eventual lack of confidence, and now am happily at Citi. The upside at the later far outweighs any upside at the former. The domestic focus of WFC has limited potential especially if QE2 fails the US economy. I left WFC because the Wachovia merger was shockingly rushed, the due diligence was flawed, and there’s a Rubic’s cube of purchase accounting and loan mod’s going on in the WFC mortgage portfolio that are masking the credit quality issues. Do your homework. The Berkshire Hathaway purchase of add’l WFC stock and simultaneous dumping of BAC last week was entirely designed to mollify the Atkin’s departure announcement and that seemed to work in the short term to buffer the decline in the stock price. I know Howard Atkins and he is exceedingly bright & absolutely above board. I also know Stumpf, an intellectual light weight and appointed “front man”, and there’s no comparison. Howard would not leave the company to have Tim Sloan, another junior weight who tows the company line , to sign the 2010 SOX if there wasn’t a serious dispute of strategy and approach at hand. Something on that balance sheet is ticking. Good luck.

  13. jay

    I was a senior at Wells Fargo for 12 years, left voluntary because of an eventual lack of confidence, and now am happily at Citi. The upside at the later far outweighs any upside at the former. The domestic focus of WFC has limited potential especially if QE2 fails the US economy. I left WFC because the Wachovia merger was shockingly rushed, the due diligence was flawed, and there’s a Rubic’s cube of purchase accounting and loan mod’s going on in the WFC mortgage portfolio that are masking the credit quality issues. Do your homework. The Berkshire Hathaway purchase of add’l WFC stock and simultaneous dumping of BAC last week was entirely designed to mollify the Atkin’s departure announcement and that seemed to work in the short term to buffer the decline in the stock price. I know Howard Atkins and he is exceedingly bright & absolutely above board. I also know Stumpf, an intellectual light weight and appointed “front man”, and there’s no comparison. Howard would not leave the company to have Tim Sloan, another junior weight who tows the company line , to sign the 2010 SOX if there wasn’t a serious dispute of strategy and approach at hand. Something on that balance sheet is ticking. Good luck.

  14. what jay?

    I was a senior at Wells Fargo for 12 years, left voluntary because of an eventual lack of confidence, and now am happily at Citi. The upside at the later far outweighs any upside at the former. The domestic focus of WFC has limited potential especially if QE2 fails the US economy. I left WFC because the Wachovia merger was shockingly rushed, the due diligence was flawed, and there’s a Rubic’s cube of purchase accounting and loan mod’s going on in the WFC mortgage portfolio that are masking the credit quality issues. Do your homework. The Berkshire Hathaway purchase of add’l WFC stock and simultaneous dumping of BAC last week was entirely designed to mollify the Atkin’s departure announcement and that seemed to work in the short term to buffer the decline in the stock price. I know Howard Atkins and he is exceedingly bright & absolutely above board. I also know Stumpf, an intellectual light weight and appointed “front man”, and there’s no comparison. Howard would not leave the company to have Tim Sloan, another junior weight who tows the company line , to sign the 2010 SOX if there wasn’t a serious dispute of strategy and approach at hand. Something on that balance sheet is ticking. Good luck.

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