JP Morgan: Earnings Beat Estimates
JP Morgan Chase said second-quarter profit and revenue were better than analyst estimates. In Q2, the financial giant earned $5.4 billion, or $1.27 per share (vs. estimates of $1.21 and up from $1.09 in Q2 2010) on revenue on a managed basis (revenue excluding the impact of credit-card securitizations and on a tax-equivalent basis) of $27.4 billion (vs. estimates of $24.91 billion), an increase of 7 percent from a year ago and up 6 percent from Q1.
In Q2 this year, the company benefited from not having to pay a one-time tax in the UK on bank bonuses, which amounted to cost of $.14/share in the second quarter of 2010.
Other highlights from report:
- Investment Bank reported strong earnings of $2.06 billion, with profits surging 49 percent. Investment Banking generated 38 percent of the total earnings and JPM earned the top ranking for Global Investment Banking Fees year-to-date.
- Commercial Banking reported record revenue and continued loan growth.
- More customers paid credit card bills on time. Thirty-day delinquency rates dropped to 2.98 percent from 4.96 percent in the same quarter of 2010 and 3.57 percent in the first quarter of 2011.
- The rate of credit cards charged off as bad debt fell to 5.82 percent from 10.2 percent the prior year and 6.97 percent in the previous quarter.
- The bank was able to reduce credit-card loss reserves by $1 billion.
- The credit-card division had profit of $911 million, for a total of 17 percent of the bank's net income for the quarter. Considering that the credit card division lost money for all of 2009, these results represent a major turnaround.
- The firm has hired over 10,000 employees year-to-date.
JP Morgan stock is trading nearly 3 percent higher in the pre-market.
