Wachovia outlook 'bleak,' analyst says

Meredith Whitney, an analyst at Oppenheimer & Co. of New York, said the earnings outlook for Wachovia Corp. has been “drastically diminished” and that prospects for shareholders of the bank are “bleak,” according to Bloomberg.

Ms. Whitney reduced her rating for the Charlotte, N.C.-based bank to “underperform” from “perform.”

Additionally, she predicted that the company will record a loss of $1.35 per share this year and 35 cents per share next year. She had previously estimated that the company would see a profit of $1.55 per share this year and $2.65 next year.

Wachovia shares have fallen 81% over the past 12 months.

The company ousted G. Kennedy Thomson as its chief executive on June 2 after it slashed its dividend and raised $8 billion in capital.

The bank hired Treasury undersecretary Robert K. Steel as chief executive on July 9 and announced that it would report a second-quarter loss ranging between $2.6 billion and $2.8 billion on July 22 (InvestmentNews, July 10).

Wachovia spokeswoman Christy Phillips Brown declined to comment in the Bloomberg report.

Shares of Wachovia were up 4 cents to $9.88 in mid-afternoon trading.

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