JPMorgan Earnings Jump 55%, Surpassing Estimates

JPMorgan Chase (JPM) said Tuesday its first-quarter profits rose 55% to easily top Wall Street estimates, as strong results from its investment banking operations offset losses on consumer loans.

For the three months ended Mar. 31, the nation's second-largest bank by assets earned $3.3 billion, or 74 cents a share, up from $2.1 billion, or 40 cents a share, in the prior-year period. Analysts, on average, forecast earnings of 64 cents a share, according to data from Thomson Reuters.

CEO Jamie Dimon said the firm's profits reflected another strong quarter for investment banking, particularly in fixed-income markets, and continued solid performance across asset management, commercial banking and retail banking. "Unfortunately, these good results were partially offset by high losses in the consumer credit portfolios," Dimon noted in a press release.

Improving Economic Trends

JPMorgan, which was the top underwriter of U.S. stocks and bonds last year, said net income from investment banking climbed to $2.5 billion, an increase of $865 million from the prior-year period. Net revenue edged down to $8.3 billion, from $8.4 billion last year.

However, the bank's retail financial services swung to a net loss of $131 million, compared with net income of $474 million in the prior-year period. Revenue fell 12% to $7.8 billion, hurt by lower loan and deposit balances as well as lower mortgage fees and related income. Credit-loss provisions fell to $7.01 billion, from $10.06 billion a year ago and $8.9 billion in the previous quarter.

"While the economy still faces challenges, there have been clear and broad-based improvements in underlying trends," Dimon said. "We believe these improvements will continue and are hopeful they will gather momentum, resulting in a strong recovery."