JP Morgan Earnings Surpass Estimates

JP Morgan (NYSE:JPM) said on Wednesday that its profits surged sevenfold in the third quarter to $3.6 billion, or 82 cents a share from $527 million, or 9 cents a share, in the same period a year ago.

Wall Street’s expectations were that the New York City-based bank, which was forced to take massive write-downs on the value of its investment-banking assets a year ago, would report a profit of $2.03 billion for the quarter, or 52 cents a share.

Revenues at the bank jumped by nearly 80% to $28.8 billion, led by a strong trading performance in its investment banking division that saw its profits climb to $1.9 billion, more than double what it was a year ago. Meanwhile, investment-banking revenue from fixed-income came in at $5 billion, compared with markdowns of $3.6 billion a year earlier.

Company CEO Jamie Dimon, acknowledged the firm’s “strong earnings power…with broad-based growth” across its divisions,” but still gave a cautious outlook.

“While we are seeing some initial signs of consumer credit stability, we are not yet certain that this trend will continue,” he said in a statement. “Credit costs remain high and are expected to stay elevated for the foreseeable future in the Consumer Lending and Card Services loan portfolios,” he added.

The co. also said its nonperforming assets, or loans that are at least 90 days past due, more than doubled in Q3 from the year-ago period to $20.4 billion as the economy weakened.

JP Morgan, as one of the nation’s largest banks, is the first to report its third-quarter earnings. Bank of America (NYSE:BAC), Citigroup (NYSE:C) and Goldman Sachs (NYSE:GS) will also release results later this week.

JPM shares rose in today’s trading to mid $47 levels from $45.66 at the close on the NYSE yesterday.

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