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JPMorgan Q2 Results Top Estimates

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JPMorgan Chase & Co. (JPM) reported a profit for the second-quarter that increased about 13 percent from last year, reflecting strong lending results offset weaker trading.

Both earnings per share and quarterly revenues topped analysts' expectations.

Jamie Dimon, Chairman and CEO, said,"We continued to post very solid results against a stable-to-improving global economic backdrop. The U.S. consumer remains healthy, evidenced in our strong underlying performance in Consumer & Community Banking."

"Loans and deposits continue to grow strongly, and card sales and merchant processing volumes were up double digits, reflecting our consistent investment in the business. In the Corporate & Investment Bank, we maintained our leadership in Banking, while Markets revenue was down amid lower volatility and client activity," Dimon said.

Net income for the second-quarter grew 13 percent to $7.03 billion from last year's $6.20 billion, with earnings per share improving to $1.82 from $1.55 in the previous year. Analysts polled by Thomson Reuters expected the company to report earnings of $1.58 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue on a reported basis totaled $25.5 billion up from 24.4 billion in the previous year.

Quarterly net revenue-managed for the quarter rose about 5 percent to $26.41 billion from $25.21 billion last year. Analysts expected revenue of $24.96 billion for the quarter.

Net interest income was $12.5 billion, up 8%, primarily driven by the net impact of rising rates and loan growth, partially offset by declines in Markets net interest income. Non-interest revenue was $13.9 billion, up 2%, driven by a benefit related to a legal settlement in Corporate, higher Banking revenue in the Corporate & Investment Bank or "CIB", higher auto lease revenue, and higher revenue in Asset & Wealth Management.

These increases were predominantly offset by higher Card new account origination costs, lower Mortgage Banking revenue and lower Markets revenue in the CIB.

Noninterest expense was $14.5 billion, up 6%, reflecting the absence of a legal benefit recorded in the prior-year quarter, as well as higher auto lease depreciation and FDIC-related expenses.

The provision for credit losses was $1.2 billion, down from $1.4 billion in the prior-year quarter.

The latest-quarter included net reserve releases in the Wholesale portfolio of $241 million driven by Energy, offset by a net reserve build in the Consumer portfolio of $252 million driven by Card. The prior-year quarter included net reserve builds in both Wholesale and Consumer totaling approximately $200 million.

Markets & Investor Services revenue was $5.8 billion, down 11%, driven by lower Markets revenue, down 14%. Fixed Income Markets revenue was down 19% compared to a strong prior-year quarter, predominantly driven by lower revenue in Rates, Credit, and Commodities. The decline was due to reduced flows driven by sustained low volatility and tighter credit spreads.

In the Friday pre-market trade, JPM is currently trading at $92.32, down $0.91 or 0.98 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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