Investment Banking Unit Pushes JPM to Strong Profit

Posted Jan 15th 2010 8:30AM by Tom Johansmeyer
Filed under: Earnings Reports, JPMorgan Chase (JPM), Financial Crisis

Thanks to strong results from its investment banking unit, JPMorgan Chase (JPM) was able to turn in a fourth quarter profit of $3.3 billion. This is a profound increase from the Q4 profit of $702 million posted in 2008.

JPM, which is the second largest bank in the U.S. in terms of assets, has performed best throughout the financial crisis, as evidenced by its substantial year-over-year increase in Q4 profit. For the last quarter of last year, JPM generated $25.2 billion in revenue.

The bank reported a quarterly profit of 74 cents a share, a vast improvement from the profit of 6 cents a share it announced a year ago. The result also beat analyst expectations soundly. According to Thomson Reuters, analysts expected a profit of 61 cents a share, on average. Revenue didn't meet analyst expectations, which were $27 billion.

For the full year, analysts expect earnings of $2.12 a share, an increase of 35.4%, on revenue of $110.2 billion, which would have been an increase of 63.8% from the entirety of 2008. Revenues only hit $108.6 billion, just shy of analyst expectations but still up 49% year-over-year, but net income surged $2.26 a share, well ahead of expectations.

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