JPMorgan kicked off a veritable deluge of bank earnings on Tuesday, beating on both the top and bottom lines.
Managed revenue was $30.1 billion, ahead of the $28.47 billion the street was looking for. The range there was $27.99 billion to $29.23 billion. Adjusted EPS came in at $2.68, handily beating consensus of $2.46 (range was $2.32 to $2.54). Net income was $9.1 billion.
NII looks like a beat, helping propel the shares higher in the premarket. In Q2, the bank cut its annual net interest income outlook to $57.5 billion.
Q1 was the high-water mark for Fed-assisted NII boosts.
After falling 3% in Q2, FICC sales and trading revenue was $3.56 billion in the third quarter. That is up 25% YoY, and well ahead of consensus, which was looking for $3.09 billion. “Markets performance was solid, reflecting improved client activity — particularly in Fixed Income”, Jamie Dimon remarked.
Rates volatility surged in August, when hedging flows exacerbated a growth-scare-induced plunge in yields. Markets were also forced to digest all manner of trade uncertainty that month.
Equities sales and trading revenue was $1.52 billion in Q3. That’s down 5.1% YoY, and trailed estimates.
Investment banking revenue was $1.87 billion up 8.1%. That too, is a beat. The estimate there was $1.8 billion. The bank cites higher debt and equity underwriting fees. “We had record third quarter IB fees with particularly strong performance in DCM and ECM, and year-to-date we maintained our #1 global ranking with share gains across products and regions”, Dimon boasted.
Commenting on the macro outlook, he said the US economy has slowed – albeit “slightly”.
“The consumer remains healthy with growth in wages and spending, combined with strong balance sheets and low unemployment levels”, he went on to say, adding an obligatory caveat about the deleterious impact of trade tensions. “This is being offset by weakening business sentiment and capital expenditures mostly driven by increasingly complex geopolitical risks, including tensions in global trade”.
All in all, it’s hard to see how this isn’t a good report. The shares were up handily.