JPMorgan Chase & Co. Earnings beat forecasts

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By abarnett on July 17, 2014 Consumer Staples

The leading financial services firm, JPMorgan Chase (NYSE: JPM ) reported second quarter earnings of $1.46, better than the analysts’ expectations of $1.29. Nevertheless, the figures declined 9%, falling from $1.60 during the same period last year.

Earnings fell to $6 billion vs the $6.5 billion in the same quarter last year. The company also saw a decline in revenue which fell to $1.3 billion from the previous numbers of $1.8 billion.

Moreover, net income of the Corporate and Investment Bank at JP Morgan also posted a decline of 31% from a year earlier to value $2 billion. Revenue at the bank market also slipped 23% from the previous year to $2.9 billion. It was hurt by a drop in trading revenue which includes commodity contracts, debt and equity revenue.

The bank however did note that it identified the legal expenses as a cause in the reduction of EPS by $0.13 as well as the $500 million drop in net income in the second quarter.

JP Morgan Chase saw some encouraging signs of a pickup in some of its businesses including Commercial Banking and Asset Management, wherein the net income rose by 6% and 10% respectively, to a combined total of $1.2 billion.

CEO Jamie Dimon, JPMorgan Chase stated in the company’s earnings announcement that the firm managed to deliver a strong performance even in the face of persistent headwinds in Market and Mortgage finance. He also mentioned that the deposit growth of card sales numbers and Consumer & Community Banking had improved much faster than the rest of the industry, including record making loan originations in the company’s Business Banking.

Overall, the total return on assets valued 0.99% and as far as tangible common equity returns are concerned, the figures stood at 14%. The numbers saw an improvement from this year’s first quarter, even though these were below figures reported in 2013 second quarter.

The return on assets during the winter quarter last year stood at 1.09%, greater than the ROA figures of the second quarter 2014 which currently value 0.99. On the other hand, the return on assets during the present year’s first quarter was 0.89.

Similarly Return on Tangible Common Equity during the second quarter of 2014 saw an increase from the numbers posted in the present year’s first quarter. The figures rose from 13% to 14%. However, both of these values were below the return on tangible common equity reported in the winter quarter last year which stood at 17%.

Dimon concluded his speech saying that JPMorgan Chase and Bank had been able to achieve extraordinary milestones by overcoming remarkable challenges during this quarter which also celebrated the tenth anniversary of JPMorgan Chase and Bank. He also contributed that the firm will continue to progress by adapting to the new worldwide financial architecture and make advancements to their control agenda. In the end he remarked that he had much greater pride in the company now.