Stock Market

JPMorgan easily tops profit and revenue forecasts

JPMorgan Chase easily topped expectations for its third-quarter results, as the bank reported Friday morning that it had seen strong loan growth.

The firm reported quarterly earnings of USD 1.58 per share on revenue of USD 25.51 billion. Analysts on Wall Street had expected earnings of USD 1.39 a share on about USD 24 billion in revenue, according to a consensus estimate from Thomson Reuters.

Shares of JPMorgan popped more than 1.5 percent higher in premarket trading after the banks results were released.

Jamie Dimon, the bank’s chairman and CEO, said JPMorgan saw both loans and deposits grow in the quarter

“We delivered strong results this quarter with each of our businesses performing well. We had record net income in Commercial Banking and record loan balances in Asset Management. The Corporate & Investment Bank reported its best third quarter revenue. In the Consumer businesses, we grew both loans and deposits double-digits, and our new card product, Sapphire Reserve, has gotten a great response – underscoring our unwavering commitment to enhancing customer engagement,” Dimon said in a release.

Still, the company’s net income fell to USD 6.29 billion in the third quarter from USD 6.8 billion for the same time last year — earnings per share fell against the third-quarter of 2015 from USD 1.68, though the company attributed the decline to taxes.

“Net income reflects higher income tax expense in the current quarter,” the bank said, explaining that “the prior-year quarter included tax benefits of USD 2.2 billion due to the resolution of tax audits and the release of deferred taxes.”

The bank also said Friday that it returned USD 3.8 billion to shareholders in the third quarter.

Wall Street analysts who assign 52-week price targets to JPMorgan are betting that the stock will go higher, according to consensus data from FactSet, but some have voiced concern that the shares may have topped out amid a full valuation and slower investment banking trends.

In September, JPMorgan surpassed Wells Fargo to become the world’s most valuable bank by market capitalization. That change came as JPMorgan rose slightly and Wells suffered the fallout of a phony customer account scandal.

In general, investors are looking at Friday’s spate of bank earnings announcements to offer some indication of the strength of the US economy. One key area being watched is loan growth, which can indicated the health of businesses and consumers.

Over the last three months, banks have been one of the top performing sectors, but those companies have struggled the whole year with moderate economic growth, lowered expectations for a US Federal Reserve interest rate hike and one of the worst starts to a year for the US stock market.