On Thursday, October 12, JPMorgan Chase (NYSE:$JPM) posted Q3 earnings well above Wall Street estimates. However, share prices still fell as investors focused on a massive drop in trading revenue.
Let’s take a look at how JPMorgan Chase did in comparison to a consensus estimate from analysts surveyed by Reuters:
– Earnings Per Share: $1.76 versus $1.65
– Revenue: $2.62 billion versus $25.23 billion
Fixed income trading revenue plunged 27% to $3.16 billion, which is worse than the $3.25 billion forecasted by FactSet.
Shares dropped more than 0.7% at one point in pre-market trading after increasing marginally ahead of the earnings release. The majority of the lost ground was later recovered. On the year, the stock is up more than 11%.
“It’s a good beat,” said Jeffery Harte, who is the principal of Sandler O’Neill. “The credit trends are favorable, the expenses are in line, the capital markets stuff didn’t miss too badly.”
In regards to the drop in fixed-income trading revenue, JPMorgan Chase said “lower revenue across all products was driven by sustained low volatility and tighter credit spreads.” Equities trading revenue dropped 4% “reflecting lower revenue in derivatives predominantly offset by strength in Prime Services and Cash Equities.”
In Q3, overall trading revenue plunged 21%.
Featured Image: depositphotos/TKKurikawa
