JP Morgan (JPM) Stock Rallies After Third Quarter Earnings & Revenue Beat

Shares of JPMorgan Chase & Co. (JPM) were trading up $1.03 or 1.5% to $68.77 in Friday’s premarket after the company released better than expected earnings and revenue for its fiscal third quarter.

JP Morgan Chase & Co. stock had closed at $67.74, down 0.5% in Thursday’s regular trading session.

Here's what you need to know

New York City based JP Morgan is the largest bank by assets in the United States, and as of last year, the second largest bank by assets in the world.
With well over $2.5 trillion in assets, Forbes magazine ranks JP Morgan as the second largest public company in the world by assets.

The bank’s main lines of business are in investment banking and asset management, treasury and securities services and private wealth management.
JP Morgan (JPM) Stock Rallies After Third Quarter Earnings & Revenue Beat
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JP Morgan stock is a component of the Dow Jones Industrial Average.

JP Morgan Chase reported it had earned $3.8 billion or $1.24 per share in the third quarter compared with $4.3 billion or $1.35 in the same quarter one year ago. Third quarter revenue declined to $17.8 billion from $18.7 billion in last year’s third quarter.

On an adjusted basis, JP Morgan reported a profit of $6.29 billion or $1.58 per share versus $6.8 billion or $1.68 per share in last year’s third quarter. The company had benefited from a one-time $2.2 billion tax benefit in last year’s third quarter.

Net revenue—revenue minus interest expense—came to $25.5 billion, an increase of 8% from the same quarter last year. The analyst consensus was for the company to earn $1.39 per share on revenue of $24 billion.

Thanks to strong markets and higher trading activity related to the UK’s June Brexit vote, JP Morgan's trading revenue increased by a third to $5.8 billion from $4.3 billion in the same period last year. Due to increased central bank action in the European Union along with money market reforms, fixed income trading revenue was up 48%. Trading in equities was mostly unchanged at $1.4 billion.

Jamie Dimon, its Chief Executive, said in the company’s press release that, “We delivered a 13% ROTCE and over $6 billion of net income in a third quarter. We have provided credit and raised capital this year totaling $1.7 trillion for our customers, small businesses, clients and governments around the world. It's a testament to the power of our platform and our people. To remain best-in-class, we continue to invest significant resources in talent development, innovation, technology, security and controls”

The corporate and investment banking unit showed a profit of $2.9 billion, about twice the $1.5 billion reported in last year’s third quarter, while revenue at the division was a record for the third quarter at $9.5 billion. JP Morgan’s consumer bank made a profit of $2.2 billion versus $2.6 billion last year, while the company’s commercial bank earned a record $778 million compared to $518 million in the same quarter last year.

JP Morgan Chase & Co. stock is up almost 3% year to date and will probably test its 52-week high of $69.06 later in this morning’s regular trading session.

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Published on Oct 14, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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