JPMorgan Chase reported its second-quarter earnings to show that activity is strong, beating top and bottom line numbers on the heels of strong lending results that have offset trading declines. In spite of this, though, trading took a bit of a downward spin.
Taking a closer look, JPMorgan Chase showed an adjusted earnings per share of $1.71, up from $1.58. In addition, revenue was also adjust upward at $26.41 billion vs $24.96 billion.
Now, shares bumped up just 1 percent in premarket trades before falling negative 1 percent. Apparently, traders have expressed some concern over lending income, but there is also some caution over the fact that previously strong results had already been priced into the stock. You may recall that shares reached an all-time high on July 6, last year, are have already boomed upwards 8 percent, this year.
Accordingly, JPMorgan Chase CEO Jamie Dimon notes, “Loans and deposits continue to grow strongly, and card sales and merchant processing volumes were up double digits, reflecting our consistent investment in the business. In the Corporate & Investment Bank, we maintained our leadership in Banking, while Markets revenue was down amid lower volatility and client activity.”
Still, JPMorgan Chase lowered its net interest income forcecast on the year—by roughly half a billion—to $4 billion over last year. JPMorgan Chief Financial Officer, Marianne Lake, comments that most of this reduction was the result of lower-than-expected net interest income through the second quarter of the year.
Dimon goes on to say, “Commercial Banking delivered record results this quarter with broad strength across products and markets. And in Asset & Wealth Management, the performance also was excellent with record net income and AUM.”
In addition, RBC Capital Markets banking analyst Gerard Cassidy notes, “JPMorgan has put up remarkably strong loan growth and it’s slowed down a little bit this quarter, but we also saw the net interest margin, which is very critical for all the banks, that came in lower than expected due to higher funding costs. So I think that’s the reason why they’re guiding down on the net interest revenue for the year.”
Finally, Dimon concludes by advising that the bank will continue to post very solid results in parallel with the stabilizing global economy. He notes: “The US consumer remains healthy, evidenced in our strong underlying performance in Consumer & Community Banking.”