Wells Fargo (WFC) shares plummeted 5.03% in Tuesday's trading session, despite reporting better-than-expected second-quarter earnings. The steep decline came as the bank lowered its full-year net interest income outlook, overshadowing its strong quarterly performance.

The San Francisco-based lender reported earnings of $1.60 per share for the second quarter, surpassing analysts' expectations of $1.41 per share. Revenue also increased by 0.6% to $20.82 billion, beating the consensus estimate of $20.75 billion. However, net interest income, a key metric for banks, declined 1.8% to $11.71 billion, falling short of the expected $11.89 billion.

In a significant revision to its guidance, Wells Fargo now expects its 2025 net interest income to be "roughly in line" with the 2024 level of $47.7 billion. This marks a notable downgrade from its previous forecast in April, which projected a 1% to 3% year-over-year increase. The bank attributed this change primarily to the impact of lower interest rates on floating-rate assets and shifts in deposit mix. Despite the disappointing outlook, Wells Fargo announced plans to increase its third-quarter common stock dividend by 12.5%, signaling confidence in its capital position.