JPMorgan Chase & Co. Earnings: You’ll LOVE Our 17% Loss in Revenues

S&P 500 (NYSE:SPY) component JPMorgan Chase & Co. (NYSE:JPM) posted a decrease in profit as revenue declined. J.P. Morgan Chase is a global securities, investment banking and retail banking firm with operations worldwide.

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JPMorgan Chase Earnings Cheat Sheet for the Second Quarter

Results: Net income for JPMorgan Chase & Co. fell to $4.96 billion ($1.21 per share) vs. $5.43 billion ($1.27 per share) a year earlier. This is a decline of 8.7% from the year-earlier quarter.

Revenue: Fell 17.2% to $22.18 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: JPMorgan Chase & Co. beat the mean analyst estimate of 78 cents per share. Analysts were expecting revenue of $21.93 billion.

Quoting Management: Jamie Dimon, Chairman and Chief Executive Officer, commented on financial results: “Importantly, all of our client-driven businesses had solid performance. However, there were several significant items that affected the quarter’s results – some positively; some negatively. These included $4.4 billion of losses on CIO’s synthetic credit portfolio, $1.0 billion of securities gains in CIO and a $545 million gain on a Bear Stearns-related first-loss note, for which the Firm now expects full recovery. The Firm’s results also included $755 million of DVA gains, reflecting adjustments for the widening of the Firm’s credit spreads which, as we have consistently said, do not reflect the underlying operations of the Firm. The Firm also reduced loan loss reserves by $2.1 billion, mostly for the mortgage and credit card portfolios. These reductions in reserves are based on the same methodologies we have used in the past – the good news is that these reductions reflected meaningful improvements in delinquencies and estimated losses in these portfolios. We continue to maintain strong reserves.”

Key Stats:

For each of the last four quarters, the company has seen its net income fall. In the first quarter, net income fell 3.1% while the figure fell 22.8% in the fourth quarter of the last fiscal year and 3.5% in the third quarter of the last fiscal year.

The company has now beaten estimates the last two quarters. In the first quarter, it topped expectations with net income of $1.31 versus a mean estimate of net income of $1.17 per share.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is $1.03 per share, down from $1.20 ninety days ago. For the fiscal year, the average estimate has moved down from $4.82 a share to $4.30 over the last ninety days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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