JP Morgan Chase shares surge after posting record revenue above Wall Street expectations

J.P. Morgan Chase posted profit and revenue that exceeded analysts’ expectations on the strength of consumer banking operations that helped the bank mitigate the impact of lower interest rates.

The bank said third-quarter profit rose 8% to $9.1 billion, or $2.68 a share, exceeding the $2.45 estimate of analysts surveyed by Refinitiv. Revenue also rose 8% to $30.1 billion, exceeding the $28.5 billion estimate, and the bank cited growth in home loans, auto and credit cards. The stock rose 1.7 percent in early trading.


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“The consumer remains healthy with growth in wages and spending, combined with strong balance sheets and low unemployment levels,” CEO Jamie Dimon said in the earnings release. “This is being offset by weakening business sentiment and capital expenditures mostly driven by increasingly complex geopolitical risks, including tensions in global trade.”

Banks have this year on worries the Federal Reserve’s shift to easing rates will squeeze the industry’s profit margins. The Fed cut rates twice in the third quarter to avert a slowdown, and banks including J.P. Morgan and Wells Fargo warned last month that net interest income would be lower than earlier guidance.

Still, the bank posted $14.4 billion in the third quarter, exceeding the estimate of Morgan Stanley’s Betsy Graseck by almost $300 million, as J.P. Morgan grew its balance sheet, the firm said.

Despite fears of an encroaching slowdown, the consumer has supported the U.S. economy, borrowing more and largely repaying debts on time. Analysts will scrutinize the bank’s charge-offs for any signs of weakness in consumer and corporate borrowing.

Another area that will be closely watched is J.P. Morgan’s trading desks. While CEO Jamie Dimon said last month that third-quarter trading revenue is expected to climb 10% from a year earlier, that figure is still 10% lower than the bank’s results in the second quarter, when it posted $5.2 billion.

Finally, as a lead advisor and lender to WeWork, analysts will be watching to see if the implosion of the coworking company’s IPO impacted J.P. Morgan’s results in any way.

Here’s what Wall Street expected:

  • Earnings: $2.45 per share, a 4.7% increase from a year earlier, according to Refinitiv.
  • Revenue: $28.5 billion, a 2.4% increase from a year earlier.
  • Net Interest Margin: 2.41%.
  • Trading Revenue: Equities $1.58 billion, Fixed Income $3.19 billion, according to FactSet.

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