JPMorgan Reports Dimon’s First Loss on a Legal Charge

JPMorgan ($JPM) released earnings this morning. From Bloomberg:

JPMorgan Chase & Co. (JPM) reported its first loss under Chief Executive Officer Jamie Dimon after taking a $7.2 billion charge to cover the cost of mounting litigation and regulatory probes.

The third-quarter loss was $380 million, or 17 cents a share, compared with a profit of $5.71 billion, or $1.40, a year earlier, the New York-based company said today in a statement. Shares of the company rose 2.6 percent at 7:50 a.m. after profit adjusted for one-time items beat analysts’ estimates.

Dimon, 57, who led JPMorgan to record earnings in each of the past three years, is grappling with regulatory investigations and tightening internal controls following its more than $6.2 billion trading loss last year. The legal costs contributed to a 54 percent surge in non-interest expenses to $23.6 billion, as revenue dropped 8 percent from a year earlier.

“In this highly charged and unpredictable environment, with escalating demands and penalties from multiple government agencies, we thought it was prudent to significantly strengthen” the bank’s legal reserves, Dimon said in the statement. “While we expect our litigation costs should abate and normalize over time, they may continue to be volatile over the next several quarters.”

JPMorgan rose to $53.90 in New York trading from $52.52 at the close yesterday. Earnings adjusted for one-time items were $1.42 a share, exceeding the $1.30 average estimate of 20 analysts surveyed by Bloomberg.

At mid-day trading, the stock is only slightly down from the morning’s open at $52.96.

Posted by on October 11th, 2013 at 11:35 am


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