Wells Fargo expects earnings of $3 billion

Wells Fargo & Co said on Thursday it expects to report net income of about $3 billion for the first quarter.

The results appeared to beat analysts' estimates, and Wells Fargo shares soared in premarket trading.

In this terrible environment, to exceed on the upside is going to raise the bar pretty high, said Matt McCormick, portfolio manager and banking analyst at Bahl & Gaynor Investment Counsel. Wells Fargo is clearly a dominant bank, one of the best operators out there.

It could not immediately be determined whether the $3 billion in net income was before or after dividends paid to the U.S. Treasury. The bank has issued $25 billion in preferred shares to the government.

The fourth-largest U.S. bank reported preliminary earnings of about 55 cents a share after preferred dividends, compared to 60 cents a year earlier.

Analysts had been expecting quarterly profit of 26 cents a share before exceptional items, according to Reuters Estimates. It was not clear if that figure was comparable to the preliminary number of 55 cents.

A year ago, the bank reported first-quarter profit of $2 billion. The bank is due to report full first-quarter results on April 22.

Wells Fargo shares climbed nearly 34 percent to $19.90 in premarket trading.

Our business momentum is strong and we expect our operating margins to remain at the top of our peer group, Chief Executive Officer John Stumpf said in a statement.

The San Francisco bank slashed its dividend 85 percent in March, which it said would save it $5 billion a year.

The bank also said last month it was planning $2 billion in additional cost cuts this year, starting in the second quarter.

Wells Fargo bought Wachovia Corp for about $12.5 billion on December 31. The bank has said it expects $5 billion in annual cost savings from the acquisition.

(Reporting by Elinor Comlay; editing by John Wallace)