Key Takeaways
- JPMorgan Chase shares lost ground Friday despite reporting earnings and revenue that beat analyst expectations as its net interest income missed estimates.
- JPMorgan's net interest income declined after reaching a record high in the fourth quarter of 2023.
- CEO Jamie Dimon said in his annual shareholder letter earlier this week that the bank is prepared for a wide range of interest rates and economic outcomes, from a recession to a soft landing or significant growth.
JPMorgan Chase (JPM) shares fell over 5% in early trading Friday following the release of the bank's first-quarter earnings report, which showed the bank beat estimates for earnings and revenue, but its net interest income was below expectations.
JPMorgan reported adjusted net income of $14 billion or $4.63 per share, on total revenue of $41.9 billion, above analyst estimates compiled by Visible Alpha, as well as last year's Q1 figures.
However, net interest income came in below expectations at $23.2 billion, and well below the record number it set of $24.1 billion in the final quarter of fiscal 2023.
Analysts moderately upgraded their forecasts for the bank's earnings in the past week.
| Q1 2024 Actuals | Analyst Estimates for Q1 2024 | Q1 2023 | Year-Over-Year Change (%) | |
|---|---|---|---|---|
| Net Revenue | $41.9B | $41.28B | $38.3B | 9.3% |
| Diluted Earnings Per Share | $4.63 | $4.14 | $4.10 | 12.9% |
| Net Income | $14B | $12.59B | $12.6B | 11.1% |
JPMorgan CEO Jamie Dimon said on Friday's earnings call that JPMorgan Chase’s customers are “in pretty good shape,” but cautioned that a number of factors like geopolitical conflict, high interest rates and inflation, and the 2024 presidential election could change the economic outlook for their consumer and business customers.
“We’re okay right now, that doesn’t mean we’re okay down the road,” Dimon said, adding "everything’s okay today, but you’ve got to be prepared for a range of outcomes, which we are.”
Earlier this week, Dimon told investors in his annual letter that the chances of a "soft landing" were dimming and that the bank would be prepared for a higher-for-longer-interest rate scenario.
"There seems to be a large number of persistent inflationary pressures, which may likely continue," Dimon said in a release Friday. "And finally, we have never truly experienced the full effect of quantitative tightening on this scale. We do not know how these factors will play out, but we must prepare the Firm for a wide range of potential environments to ensure that we can consistently be there for clients.”
JPMorgan shares were down 5.7% at $184.27 as of 11:20 a.m. ET. However, even with Friday's losses, the stock has gained about 7% year to date.
UPDATE—April 12, 2024: This article has been updated to reflect additional information from the company's earnings call and more recent share price information.
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