JPMorgan Whiffs on Fixed-Income Trading Results, Worst Since Financial Crisis


JPMorgan Chase & Co. (NYSE: JPM)

Shares of JPMorgan Chase & Co declined Tuesday after the bank reported quarterly profit that was below the expectations of Wall Street analysts for the first time in 15 quarters. The stock lost 2.7% in premarket trade as market participants digested the financial results.

JPMorgan has warned that the U.S. economy and financial markets are likely to get hurt by the ongoing government shutdown. In December, Chief Executive Jamie Dimon said a lengthy shutdown “is not going to help the economy” adding that it could hurt the company’s guidance.

The largest U.S. lender said fixed-income trading revenue declined 18% for the three months to December 31, 2018. On Monday, rival Citigroup Inc reported fixed-income trading revenue slump of 21% amid concerns of a prolonged U.S.-China trade war and a hawkish Federal Reserve.

JPM Earnings & Outlook

The company said net income for the quarter was $7.07 billion, or $1.98 per share, compared with $4.23 billion, or $1.07 per share, in the prior-year period. Total revenue jumped from $25.75 billion to $26.80 billion. Analysts had forecast adjusted earnings of $2.20 per share on revenue of $26.84, based on figures compiled by FactSet.

Revenue from Commercial Banking and Consumer and Community Banking segments beat analysts’ forecasts. However, the company’s Asset and Wealth Management and Corporate and Investment Bank units fell short of expectations. Tangible book value per share came to $56.33, up 5%, while book value per share was $70.35, also up 5%.

JPMorgan Chase CEO Comments

Jamie Dimon, chief executive officer of the bank said in the earnings release, “Despite a challenging quarter, we grew markets revenue in the investment bank for the year with record performance in equities and solid performance in fixed income.”

JPMorgan Chase & Co. Profile

JPMorgan Chase & Co. is a financial holding company, which provides financial and investment banking services. It operates its business through the following segments: Consumer and Community Banking; Corporate and Investment Bank; Commercial Banking; and Asset and Wealth Management.

The Consumer and Community Banking segment serves consumers and businesses through personal service at bank branches and through automated teller machine, online, mobile, and telephone banking. The Corporate and Investment Bank segment offers a suite of investment banking, market-making, prime brokerage, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, government and municipal entities.

The Commercial Banking segment delivers services to U.S. and its multinational clients, including corporations, municipalities, financial institutions, and nonprofit entities. The Asset and Wealth Management segment provides asset and wealth management services. The company was founded in 1968 and is headquartered in New York, NY. – CNN Money