JPMorgan shares fell 3% despite fourth-quarter earnings estimates for the fourth quarter, JPMorgan CEO Jamie Dimon listens to lunch at the Boston College Executives Club in Boston, Massachusetts, USA on November 23, 2021.
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| College Executives Club in Boston |
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Here are the numbers: Earnings: $3.33 per share versus an estimate of $3.01, according to Refinitiv.Revenue: $30.35 billion versus an estimated $29.9 billion.
JPMorgan Chase posted earnings Friday that beat analysts' expectations from expected credit losses and increased debt due to a return to the company's business segment.
Here are the numbers:
Earnings: Refinitiv $3.33 per share, for about 0 3.01.
Revenue: $30.35 billion, versus an estimated $29.9 billion.
The bank's shares fell 3.7 percent in pre-market trading. JPMorgan says it capitalized on $1.8 billion in net losses by disclosing debt-loss reserves that were never implemented; If that doesn't go up to 47 cents per share, earnings would be $2.86 per share.
After setting aside billions of dollars for debt losses before the pandemic, JPMorgan benefited as it released money steadily because borrowers had better than expected. But CEO Jamie Dimon says he doesn't consider accounting benefits a major part of business results. Even with the consolidation, JPMorgan posted its lowest profit in the past seven quarters.
"Despite headwinds associated with the Omicron variable, inflation, and supply chain disruptions, the economy continues to perform well," Daemon said in a statement. "Credits will get healthier as net costs fall extraordinarily low, and we're optimistic about US economic growth."
Although company-wide revenue rose slightly 1% to $30.35 billion in the quarter, as market revenue was offset by slowing investment banking fees, non-interest expenses increased 11% to $17.9 billion due to High compensation costs, the bank said. That's more than the $17.63 billion estimated by analysts surveyed by FactSet.
JPMorgan executives previously spoke on Wall Street of the need to invest in technology and pay employees after a year of growth; However, analysts may ask management about its spending trajectory this year.
"JPMorgan's results were surprisingly poor and hampered by unusually poor cost management," said Octavio Marenzi, CEO of Opimas Advisory, in an email statement.
Government stimulus programs have pushed consumers and businesses through the pandemic, stagnating debt growth and prompting Dimon to say last year that debt growth has been "difficult." But analysts point to a return to the fourth quarter, driven by demand from businesses and credit card borrowers.
Daniel Pinto, JPMorgan's chief operating officer, said at a conference last month that fourth-quarter trading revenue is heading for a 10% decline, driven by lower-than-record fixed income activity.
The bank said trading revenue slowed more than expected but fell 13% to $6.3 billion in the first quarter. This was largely driven by the stagnation of the bond trading desk. Investment banking helped increase investment banking fees by 37%.
The bank was forced to pay a fine of $200 million last month to settle allegations that Wall Street Department employees were allowed to use the messaging app to evade the record-keeping law.
Analysts may also question the impact of the bank's recent decision to curb overdraft fees. JPMorgan said last month it would give customers a grace period to avoid punitive fees, a move that would hurt revenue "not insignificantly" with other changes.
JPMorgan shares are up 6.2% this year before Friday, trailing The KBW Bank index by 11.6%.
This story is developing. Please see back for updates.
