JPMorgan Trips Over the Bottom Line

Banking, finance, and taxes

Published: October 13, 2015 4:40 pm

Last Updated: April 28, 2020 12:22 am

JPMorgan Chase & Co. (NYSE: JPM) released its third quarter earnings report after the markets closed on Tuesday. This banking giant had $1.32 in earnings per share (EPS) on $23.54 billion in revenue compared to Thomson Reuters consensus estimates that call for $1.37 in EPS on $23.69 billion in revenue. The same period from the previous year had $1.36 in EPS on $25.16 billion in revenue.

In the current quarter, the provision for credit losses was $682 million, down 10%, due to lower net charge-offs, largely offset by lower reserve releases. Consumer reserve releases totaled $591 million, reflecting continued improvement in home prices and delinquencies, and were largely offset by an increase in reserves across the wholesale businesses of $310 million driven by select downgrades.

Tangible book value per share in the third quarter was up 8% to $47.36. At the same time, the company had a Basel III common equity Tier 1 capital ratio of 11.4%, or $172 billion.

Roughly $2.7 billion was returned to shareholders during the quarter of which $1 billion was net repurchases and the remainder was paid in a $0.44 per share dividend.

Jamie Dimon, Chairman and CEO of JPMorgan, commented on the earnings:

We had decent results this quarter. We saw the impact of a challenging global environment and continued low rates reflected in the wholesale businesses’ results, while the consumer businesses benefited from favorable trends and credit quality. Overall, our risk management discipline and diversified platforms across the businesses are serving us well.

We continue to focus on our commitments, optimize our balance sheet and manage our expenses. We are also building the businesses for the future, dedicating resources to controls, cybersecurity and technology.

Our position of strength allows us to make significant investments to transform the businesses we operate, deliver better experiences to our customers and clients, gain share and be positioned to be a long-term winner.

Shares of JPMorgan closed Tuesday down 0.3% at $61.55 on its 52-week trading range of $50.07 to $70.61. Following the release of the earnings report, shares traded down 1.4% at $60.70 in the after-hours trading session. The stock has a consensus analyst price target of $73.25.

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