JPMorgan Chase (JPM) reported better-than-expected third-quarter earnings, with Citigroup (C) turning in mixed results and Wells Fargo (WFC) missing on earnings.
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JPMorgan Earnings
Estimates: Wall Street expected JPMorgan earnings per share for Q3 to jump 27% to $2.24. Revenue was seen up 7% to $27.203 billion.
Results: JPMorgan earnings came in at $2.34 a share. Adjusted revenue grew to $27.822 billion. Higher interest rates helped results, though home lending revenue fell. Corporate and investment banking revenue rose 2% to $8.8 billion, though fixed income revenue fell 10% to $2.8 billion and equity markets revenue rose 17% to $1.6 billion. Commercial banking revenue grew 6% to $2.27 billion. Asset and wealth management revenue climbed 3% to $3.56 billion. Consumer and community banking revenue jumped 10% to $13.29 billion.
JPMorgan reduced its loan-loss provision to $948 million vs. $1.5 billion a year earlier.
"The U.S. and the global economy continue to show strength, despite increasing economic and geopolitical uncertainties, which at some point in the future may have negative effects on the economy," Chairman and CEO Jamie Dimon said in a statement.
Stock: Shares rose 1.8% to 110.05 before the open in the stock market today. The stock slipped below its 200-day line on Wednesday and tumbled again Thursday. JPMorgan stock is forming a saucer base with a 119.43 buy point.
Citigroup Earnings
Estimates: Analysts had forecast Citigroup earnings per shares up 18% to $1.67, on revenue up 1% to $18.433 billion.
Results: EPS of $1.73 on revenue of $18.39 billion. Consumer banking revenue rose 2% to $8.65 billion, though North America retail banking and branded card revenues fell. Institutional clients revenue dipped 2% to $9.24 billion, with fixed income revenue up 9% to $3.2 billion and equity revenue up 1% to $792 million. Investment banking revenue fell 8% to $1.2 billion.
Stock: Shares jumped 2.9% to 70.35 early Friday. On Thursday, the stock fell further from a handle formation on a cup base with a 75.34 entry. Citigroup's shares were also below their 50-day and 200-day lines.
Wells Fargo Earnings
Estimates: Wells Fargo earnings per share up 12.5% to $1.17, on revenue of $21.897 billion, a 0.1% dip.
Results: EPS of $1.13 on revenue of $21.9 billion. Net interest income edged up 1% to $12.6 billion. Community banking revenue rose 2.6% to $11.82 billion though mortgage banking was weak, while wholesale banking revenue slipped 2.7% to $7.3 billion. Wealth management revenue dipped less than 1% to $4.23 billion.
Average deposits were down 3% at $1.3 trillion, and average loans were down 1% at $939.5 billion.
"We saw positive business trends in the third quarter, including growth in primary consumer checking customers, increased debit and credit card usage, and higher year-over-year loan originations in auto, small business, home equity and personal loans and lines," CFO John Shrewsberry said in a statement.
Stock: Shares climbed 2% to 52.47 before the open. Wells Fargo was in a flat base with a 59.62 buy point.
Bank earnings come amid concerns over when the strong U.S. economy might break down and when loan portfolios might get a lift from the GOP's tax-cut legislation.
The 10-year Treasury yield had risen to seven-year highs before pulling back amid the sharp stock market sell-off triggered in large part by higher rates. Short-term yields also have jumped to multiyear highs, but the spread between short- and long-term rates had widened slightly from post-crisis lows. Banks profit from a wider yield spread as they borrow short and lend long.
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