J.P. Morgan Earnings, Dividend Boost and More Share Buybacks


J.P. Morgan Chase & Co. (NYSE: JPM) reported fiscal first-quarter results before markets opened this morning. The investment bank and financial services giant reported quarterly diluted earnings per share (EPS) of $1.59 on revenue of $25.8 billion. In the same period a year ago, J.P. Morgan reported EPS of $1.19 on revenue of $26.8 billion. First-quarter results also compare to the consensus estimates for EPS of $1.40 on revenue of $25.97 billion.

One-time items added $0.18 to the bank's EPS in the first quarter. J.P. Morgan reduced its mortgage loan loss reserves and its credit card loss reserves by $1.15 billion. Absent the items, EPS came in as estimated and revenues were a little low.

The bank's CEO said:

We are seeing positive signs that the economy is healthy and getting stronger. Housing prices continued to improve and new home purchases are also starting to come back. We also saw strong performance in our credit card portfolio, with net charge-offs remaining near historic lows, another sign that consumers are healthier and more confident. … The exception is that loan growth across the industry has been softer this quarter, although year-on-year growth remained strong. Small businesses remain cautious about the recovery and fiscal uncertainty, and are not investing their capital. However, companies' balance sheets are much stronger than they were before the financial crisis and small businesses remain well positioned to invest in growth once they decide to.

The bank will raise its quarterly dividend from $0.30 a share to $0.38 beginning in the second quarter. J.P. Morgan repurchased $2.6 billion in stock during the first quarter, and the board has authorized purchases up to an additional $6 billion through the first quarter of next year.

J.P. Morgan increased its Basel I Tier 1 capital ratio to 10.2% in the fourth quarter, up from 9.8% a year ago. The bank estimates that its Basel III Tier 1 common ratio is about 8.9%, up from 8.7% in the fourth quarter of 2012.

The bank did not offer guidance in its press release, but the consensus estimates call for second-quarter EPS of $1.38 on revenues of $25.28 billion. The EPS estimate for the 2013 fiscal year is now $5.49.

Shares are trading about 0.7% lower in the premarket this morning, at $48.95. The current 52-week range is $30.83 to $51.00. Thomson Reuters had a consensus analyst price target of around $54.70 before today's results were announced.

Filed under: 24/7 Wall St. Wire, Banking & Finance, Earnings, Financial Stocks Tagged: JPM