For the first time in over two years, and only the fifth time in a decade, JPMorgan Chase & Co. (NYSE: JPM) missed earnings forecasts when it posted first-quarter 2014 results Friday.
Investors were prepared for a slip in earnings compared with Q1 of 2013. In February, JPM cautioned trading revenue was weak. The warning was especially troubling because the first quarter is traditionally a strong one.
But Q1 of 2014 wasn't just weak - it was JPM's worst quarter since 2008, during the depths of financial crisis...
- JPMorgan (NYSE: JPM) Stock Price Up Today After Earnings It hasn't been an easy year for JPMorgan: There was the London Whale scandal, which cost the Big Bank more than $6.2 billion. Fallout from the mortgage crisis brought a $13 billion fine. And just recently JPM had to shell out another $2 billion in fines for its role in the Bernie Madoff scheme. So earnings had to be awful, right? Not exactly. Somehow, CEO Jamie Dimon pulled another rabbit out of his hat...
JPMorgan (NYSE: JPM) Talks $11 Billion Settlement; Q3 Earnings at Risk
JP MorganChase & Co. (NYSE: JPM) finds itself in front of regulators yet again for misdeeds.
Chief Executive Officer (CEO) James Dimon was in Washington yesterday (Thursday) attempting to broker a settlement over the bank's sale of substandard mortgages.
Dimon met with U.S. Attorney General Eric Holder about a possible $11 billion settlement in attempts to end criminal and civil charges over JPM's questionable mortgage practices. The U.S. Justice Department said earlier in the week it could file a lawsuit over one of the bank's pending mortgage cases.To continue reading, please click here...
JPMorgan (NYSE: JPM) Earnings Preview: Five Things to Watch
The JPMorgan Chase (NYSE: JPM) earnings report due tomorrow (Friday) gives CEO Jamie Dimon a chance to put the huge trading losses from the "London Whale" behind him.
The "London Whale" trades are the are hedged strategy that went bad and cost the bank nearly $6 billion. JPM took the majority of the hit in the second quarter.
JPM stock tumbled in the weeks that followed after details were uncovered and trading losses swelled. Since then, shares have staged a notable recovery rising from $34.59 on July 11 to the recent price of $42.25.
Now JPM earnings have a chance to shake off the scandal and impress investors.
Expectations have grown for Friday's numbers, with the consensus estimate raised from $1.16 per share to projections of $1.21 per share. Estimates have increased in the last three months from $1.04.
Analysts are predicting earnings of $4.74 per share for the fiscal year, with revenue for the year to come in at $97.76 billion.
The fresh forecasts are 18.6% better from the same quarter a year ago when JPM posted earnings of $1.02 per share.
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JPMorgan (NYSE: JPM) Earnings and Five Others That Could Surprise You
Earnings season begins in earnest this week as financial giants JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC) report for the April-to-June period.
A flood of reports from other corporations follows next week before gradually slowing to a trickle by the month's end.
How investors perceive those numbers could well kick off an up- or downtrend in share prices that will continue for weeks, or even months.
That is especially true if there is an "earnings surprise."
An "earnings surprise" occurs when the revenues and profits a company reports differ significantly from analyst expectations.
Positive surprises - earnings that beat the pre-report forecasts - tend to drive stock prices higher, while negative surprises send them lower.
The bigger the surprise, the more rapid and dramatic the move becomes.
Will JPMorgan (NYSE: JPM) Earnings Surprise?One prime candidate for an earnings surprise in this cycle is JPMorgan Chase.
Usually considered one of the strongest companies in the financial sector, JPM would normally be expected to surpass the pre-report estimates. After all, the company has beat earnings in three of the past four quarters - including an 11% surprise in the January-March period, when earnings came in at $1.31 a share vs. a projected $1.18.
However, the company has been rocked by controversy following revelations that it suffered more than $4 billion in trading losses on what JPM called a "hedging strategy" but others described as an outright "bet" on interest rates.
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JPMorgan Chase (NYSE: JPM) Earnings: Don't Be Misled by Sagging Banking Sector
As the grim bank earnings roll in over the next couple of weeks, beginning with JPMorgan Chase & Co. (NYSE: JPM) tomorrow (Friday) morning, don't fall into the trap of thinking the financial sector's woes in the last quarter reflect a sinking U.S. economy.
While bank earnings are usually a good barometer for the nation's economy, many of the factors weighing down financials, such as tougher regulations and the Eurozone debt crisis, aren't necessarily a reflection on U.S. economic activity.
In fact, according to the U.S. Federal Reserve's Beige Book report, released Wednesday, the overall economy at the end of last year continued to improve slowly but steadily.
Friday the 13th for the FinancialsAnalysts have been consistently lowering earnings expectations for all the big banks in recent weeks.
"Friday the 13th will live up to its name when it comes to bank earnings," Mike Mayo, an analyst with independent research firm CLSA in New York, told Bloomberg News. "You're going to see all sorts of revenue and margin pressure and the results will be underwhelming."
The consensus estimate for JPMorgan, the nation's biggest bank by assets and a bellwether for the industry, has slid from $0.97 per share to $0.94 per share in the past month; three months ago the estimate was $1.11 per share.
That puts JPMorgan's earnings below the $1.02 per share of the previous quarter and well below the $1.13 of the year-ago quarter. JPMorgan's revenue is expected to drop 20.8% from first-quarter 2011.
And as disappointing as that sounds, JP Morgan will be one of the strongest performers this bleak bank earnings season, which follows a year in which some bank stocks fell more than 40%.
As the other major U.S. banks report earnings next week - Citigroup Inc. (NYSE: C) and Wells Fargo & Company (NYSE: WFC) on Tuesday, Goldman Sachs Group Inc. (NYSE: GS) on Wednesday and Bank of America Corp. (NYSE: BAC) and Morgan Stanley (NYSE: MS) on Thursday -- the din of negativity will be hard to ignore.
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