JPMorgan Chase & Co. (NYSE:JPM), the biggest U.S. bank by assets, retreated in pre-market trading after reporting a lower-than-expected 19 percent drop in first-quarter earnings impacted by weak revenue from fixed-income trading and mortgages.
JPMorgan slipped 3.7 percent to $55.35 at 8:10 a.m. in New York. The stock had lost 3.2 percent to $57.40 at market close yesterday.
Net income decreased to $5.27 billion, or $1.28 per share, in the three months ended March 31, from $6.53 billion, or $1.59 per share, in the year-earlier period, the New York–based firm said in a statement today. Analysts on average were looking for $1.46 a share.
Total revenue decreased 7.7 percent to $23.9 billion, well below the average estimate of $24.53 billion. The bank said non-interest expenses dropped 5 percent in the January-to-March quarter to $14.6 billion.
Revenue from fixed-income declined 21 percent to $3.8 billion in the first quarter, while revenue from equity markets fell 3 percent to $1.3 billion. Mortgage revenue plunged 42 percent to 1.6 billion.
Net income from consumer and community banking declined percent to $1.94 billion as provisions for credit losses surged 49 percent to $816 million. Revenue was $10.5 billion, down 10 percent from a year earlier.
Profit in asset management declined 9 percent to $441 million as costs rose 11 percent to $2.1 billion on headcount-related expenses. Assets under management jumped 11 percent to $1.6 trillion amid greater inflows and rising equity markets. Commercial banking reported a 3 percent profit decline to $578 million.
"We have growing confidence in the economy - consumers, corporations and middle market companies are in increasingly good financial shape and housing has turned the corner in most markets...," Chief Executive Jamie Dimon said in the statement.
The bank has been pushing to improve its profitability after net income dropped 16 percent last year due to massive legal settlements and rising costs to improve compliance with laws and regulations.
JPMorgan is the first of the top U.S. banks to report results for the first quarter. Wells Fargo & Co. (WFC) posted today a 14 percent rise to $5.89 billion in first-quarter earnings as fewer customers missed loan payments.
Citigroup Inc. (NYSE:C) reports earnings on April 14, followed by Bank of America Corp. (NYSE:BAC) on April 16. Goldman Sachs Group Inc. ((NYSE:GS) and Morgan Stanley (NYSE:MS) announce results on April 17.