Jamie Dimon Shows How It Is Done (JPM)

JPMorgan Chase (NYSE: JPM) has just released earnings and Jamie Dimon is showing he is a better manager even than the most positive reviews have given him over the years.  The banking giant made $0.11 EPS on $14.74 billion in revenues.  First Call had estimates at -$0.21 EPS and roughly $16 billion in revenues.And the individual metrics are looking much better than peers.

The company noted it had losses of $640 million after-tax forWashington Mutual merger-related items and broke out a $1.2 billioncharge to conform loan loss reserves and a $581 million extraordinarygain in the transaction.  Its net markdowns were $3.6 billion due tomortgage-related positions and leveraged lending exposures in theInvestment Bank,  There was also a $642 million loss on Fannie Mae andFreddie Mac preferred securities and a $248 million charge related tooffer to repurchase auction-rate securities.

Before the WaMu effect, Dimon increased credit reserves by $1.3 billionto $15.3 billion, resulting in loan loss allowance coverage of 3.18%for consumer businesses and 2.11% for wholesale businesses.

This is not the JPMorgan of old, but we are also not in the times ofold either.  In today’s environment this is a very solid earningsreport.  Shares closed at $40.71 yesterday and are trading north of $41.00 this morning.

Jon C. Ogg
October 15, 2008