JPMorgan Chase Crushes Earnings

The market took a shine to JPMorgan Chase's earnings because it crushed expectations -- logging earnings per share of $1.21 versus the $0.72 analysts expected.

But digging deeper, the quarter was more a feat of managing expectations than managing the business. The "London Whale" trading fiasco added another $4.4 billion of losses. JPMorgan was able to counteract those losses in the quarter with various actions like selling winners, but that's window dressing. It's also restating its first-quarter earnings downward because of larger than previously reported trading losses.

Despite the market reaction, JPMorgan's earnings were less impressive than Wells Fargo's. And its lukewarm Wall Street banking results could be bad news for Goldman Sachs and Morgan Stanley, which report next week. Of course, someone had to be on the other side of those trades.

Anand gives his thoughts on the takeaways from this earnings report in the following video.

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Anand Chokkavelu owns shares of Citigroup, Wells Fargo, and JPMorgan Chase. He also owns warrants on Citigroup, Wells Fargo, and JPMorgan Chase. The Motley Fool owns shares of JPMorgan Chase, Wells Fargo, and Citigroup and has created a covered strangle position in Wells Fargo. Motley Fool newsletter services have recommended buying shares of Goldman Sachs. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On July 14, 2012, at 4:11 PM, nickjob wrote:

    I dont want to invest in any company that steals customer money (MF Global farmers and ranchers) and hides the money in their JPM London offices. Jamie Dimon and Jon Corzine are thiefs.

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