JPMorgan Earns $1.31 Per Share

This morning, JPMorgan Chase ($JPM) reported first-quarter earnings of $1.31 per share which was 13 cents more than Wall Street’s estimate (though I saw different reports of what the consensus was). The bank’s net income fell slightly but thanks to stock buybacks, the per-share figure was slightly higher than a year ago.

The stock was up during the pre-market but the shares gradually lost ground and are now down about 2.2% for the day. My take is that the market isn’t pleased with JPM’s investment banking business. Nelson D. Schwartz at Deal Book writes:

Mortgage-related liabilities continued to be a drain on earnings, with the bank adding $2.5 billion in reserves to cover litigation expenses, reducing earnings by 39 cents a share.

Despite the run-up in the stock market, trading volumes in the first quarter haven’t been especially robust. At JPMorgan’s investment bank, revenue was down 11 percent, to $7.3 billion. Its net income was down 29 percent, to $1.7 billion.

The bank also faces tough comparisons with a strong first quarter in 2011, when healthy trading revenue and reserve releases lifted results.

The amount set aside for compensation at the investment bank fell to $2.9 billion, from $3.29 billion in 2011. Headcount dropped to 25,707 from 26,494. Based on those figures, average compensation declined to $112,800, from $124,300 a year ago.

First-quarter results included several one-time items, including a $1.8 billion gain from reduced loan loss reserves, which added 28 cents a share to earnings. It also included a $1.1 billion gain from a bankruptcy settlement linked to the acquisition of Washington Mutual, which raised profit by 17 cents.

Here’s the CFO talking about the earnings on CNBC:

On the earnings calls, Jamie Dimon said that the bank is “very conservative” with its investments. I’ve looked at the numbers and this was a very good quarter for JPM. Delinquencies are down and the credit card and mortgage business is doing well.

Posted by on April 13th, 2012 at 2:18 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Tickers: