JPMorgan Chase & Co. Earnings Dip 9%, but Surpass Analyst Expectations

JPMorgan Chase saw its earnings decline thanks to lessening mortgage and trading revenue, but it beat what many analysts feared as a sizable decline.

Jul 15, 2014 at 10:02AM

JPMorgan Chase (NYSE:JPM) announced this morning that earnings per share stood at $1.46 in the second quarter, down 9% from the $1.60 seen in the second quarter of last year. This surpassed the expectations of analysts, who had projected earnings per share would stand at $1.29, according to Yahoo! Finance.

Jpm

In total, net income stood at $6 billion in the second quarter, down from the $6.5 billion seen in the second quarter of last year. Part of the reason behind this drop was a decline in mortgage banking revenue, which fell from $1.8 billion to $1.3 billion.

In addition, the Corporate and Investment Bank division at JPMorgan Chase saw its net income fall 31% year over year to $2 billion. This was principally driven by declining revenue from its principal transactions -- its trading of debt, equity, and commodity contracts as well as its private equity investments -- which fell 23% to $2.9 billion.

The bank did note it recognized legal expenses that reduced its net income by $500 million in the second quarter and its earnings per share by $0.13.

JPMorgan Chase did see sizable improvement from its Asset Management and Commercial Banking businesses, which saw their net income rise by 10% and 6%, respectively, to $1.2 billion, combined.

"Despite continued industrywide headwinds in Markets and Mortgage, the firm has continued to deliver strong underlying performance," said the CEO of JPMorgan Chase, Jamie Dimon, in the earnings announcement. "Consumer & Community Banking deposit growth and card sales volume both outpaced the industry, and we had record loan originations in Business Banking."

In total, JPMorgan Chase saw its return on assets stand at 0.99% and return on tangible common equity at 14%. While below its results during the second quarter of 2013, these were improvements relative to the first quarter of this year:

 

Q2 2013

Q1 2014

Q2 2014

Return on Assets

1.09%

0.89%

0.99%

Return on Tangible Common Equity

17%

13%

14%

"This quarter marked the 10-year anniversary of JPMorgan Chase and Bank One coming together -- the company overcame significant challenges and achieved extraordinary things during this time," Dimon said to conclude his remarks. "We continue our progress on adapting to the new global financial architecture and on our control agenda. My pride in the company is greater than ever."

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