JPMorgan Earnings: What Happened with JPM

2 weeks ago 9

JPM topped net and gross expectations

Key Takeaways

  • Bond trading gross missed expert expectations, but equities trading gross came successful supra estimates.
  • JPMorgan has had to trust much connected gross from its enslaved and equities trading desks successful the debased involvement complaint environment. Those trading desks benefitted from volatility triggered by the COVID-19 pandemic, but that volatility has subsided recently.
  • Earnings benefitted from different merchandise of indebtedness nonaccomplishment reserves.
JPMorgan Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
EPS Beat $3.78 $3.18
Revenue Beat $30.5B $29.7B
Bond Trading Revenue Miss $4.1B $4.2B
Equities Trading Revenue Beat $2.7B $2.2B

Source: Predictions based connected analysts' statement from Visible Alpha

JPMorgan (JPM) Financial Results: Analysis

JPMorgan Chase & Co. (JPM) reported earnings for Q2 FY 2021 that bushed expert estimates by a important margin. Earnings per share (EPS) surpassed expert expectations, rising 174% twelvemonth implicit twelvemonth (YOY). The bank's quarterly gross besides came successful supra forecasts but was down 8% compared to the year-ago quarter. JPMorgan's enslaved trading gross conscionable missed expectations, portion its equities trading gross easy bushed estimates. The bank's shares fell much than 1% successful pre-market trading. Over the past year, JPMorgan's shares person provided a total return of 66.4%, good supra the S&P 500's full instrumentality of 39.0%.

JPM Trading Revenue

JPMorgan's full trading gross for the 2nd 4th was $6.8 billion, down 30% from the year-ago quarter. Bond trading gross sank arsenic overmuch arsenic 44% YOY, marking the archetypal diminution since the archetypal 4th of FY 2019. The bank's equities trading gross was up 13% YOY, importantly amended than the diminution analysts were expecting but inactive a marked deceleration from the past 5 quarters.

In the current, ultra-low involvement complaint environment, JPMorgan has had to trust much connected gross from its trading desks. The bank's net involvement income was down 8% YOY. But portion those trading desks benefitted from heightened volatility triggered by the COVID-19 pandemic implicit the past year, that volatility has subsided successful 2021, making it much hard for traders to rake successful windfall profits from large terms swings successful securities markets.

JPM Earnings Boosted by Reserve Release

JPMorgan indicated that its net received different boost from further nett reserve releases of $3.0 billion, resulting successful a $2.3 cardinal nett payment aft nett charge-offs. The slope built up its reserves against atrocious debts past twelvemonth successful anticipation of expanding indebtedness defaults amid the pandemic, which suppressed net successful the aboriginal fractional of FY 2020. But with galore businesses and households receiving fiscal enactment from the government, the expected question of defaults ne'er materialized.

"Consumer and wholesale equilibrium sheets stay exceptionally beardown arsenic the economical outlook continues to improve," said CEO Jamie Dimon. "In particular, nett charge-offs, down 53%, were amended than expected, reflecting the progressively steadfast information of our customers and clients."

JPMorgan's net person benefitted from reserve releases successful caller quarters. The slope highlighted its antecedently announced determination to summation dividend payments to shareholders and said that it plans to proceed the share repurchases nether its existing authorization. In precocious June, the Federal Reserve lifted limits connected banks' dividend payments and stock buybacks pursuing yearly bank accent tests.

JPMorgan did not supply immoderate guardant guidance successful its net property release. The bank's adjacent net study (for Q3 FY 2021) is estimated to beryllium released connected Oct. 13, 2021.

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  2. Visible Alpha. "Financial Data." Accessed July 9, 2021.

  3. JPMorgan Chase & Co. "EARNINGS RELEASE FINANCIAL SUPPLEMENT SECOND QUARTER 2021," Page 15. Accessed July 13, 2021.

  4. TradingView. "Price Chart: JPM and S&P 500." Accessed July 12, 2021.

  5. JPMorgan Chase & Co. "JPMORGAN CHASE REPORTS SECOND-QUARTER 2021 NET INCOME OF $11.9 BILLION ($3.78 PER SHARE)," Page 1. Accessed July 13, 2021.

  6. JPMorgan Chase & Co. "EARNINGS RELEASE FINANCIAL SUPPLEMENT SECOND QUARTER 2021," Page 4. Accessed July 13, 2021.

  7. JPMorgan Chase & Co. "Events & Presentations." Accessed July 12, 2021.

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