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JPMorgan Q4 Profit Down, But Results Beat Estimates


JPMorgan Chase & Co. (JPM) reported a profit for the fourth-quarter declined 37% from last year, hurt by $2.4 billion impact as a result of the enactment in the fourth quarter of 2017 of the Tax Cuts and Jobs Act. However, both adjusted earnings per share and revenue for the quarter beat analysts' expectations.

In the Friday pre-market trade, JPM is trading at $110.85 up $0.02 or 0.02 percent.

Jamie Dimon, Chairman and CEO said,"The enactment of tax reform in the fourth quarter is a significant positive outcome for the country. U.S. companies will be more competitive globally, which will ultimately benefit all Americans. The cumulative effect of retained and reinvested capital in the U.S. will help grow the economy, ultimately growing jobs and wages. We have always invested, even in difficult times, in our employees, customers and communities, and as a result of the tax plan we will be increasing and accelerating some of these investments."

Net income for the fourth-quarter declined 37 percent to $4.23 billion from last year's $6.73 billion, with earnings per share decreasing to $1.07 from $1.71 in the prior year.

Excluding significant items, net income for the fourth-quarter 2017 was $6.7 billion or $1.76 per share. Analysts polled by Thomson Reuters expected the company to report earnings of $1.69 per share for the quarter. Analysts' estimates typically exclude special items.

The provision for credit losses was $1.3 billion, up from $864 million in the prior year. The increase reflected modest net reserve builds in the current quarter of $28 million and $16 million in the Wholesale and Consumer portfolios, respectively, versus net reserve releases in the prior year of $169 million and $247 million in the Wholesale and Consumer portfolios, respectively.

Total net revenue rose 3 percent to $24.15 billion from $23.38 billion in the previous year. On a Managed Basis, net revenue was $25.45 billion, up 5% from $24.33 billion in the previous year. Wall Street expected revenues of $25.15 billion for the quarter.

Net interest income was $13.4 billion, up 11%, driven by the net impact of rising rates, as well as loan and deposit growth, partially offset by declines in Markets net interest income. Non-interest revenue was $12.1 billion, down 1%, driven by lower Markets revenue, largely offset by growth in auto lease revenue in Consumer & Community Banking and growth in Asset & Wealth Management.

Noninterest expense was $14.6 billion, up 5%, driven by higher compensation expense, higher contribution to the Firm's Foundation, higher auto lease depreciation and impairment of certain leased equipment in the Commercial Bank, partially offset by lower legal expense.

Consumer & Business Banking net revenue was $5.6 billion, up 16%, predominantly driven by higher deposit margins and strong deposit growth.

Markets & Investor Services revenue was $4.4 billion, down 22%, driven by lower Markets revenue, down 26%.

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