Friday, July 8, 2011

JPMorgan Chase & Co. (NYSE: JPM): Q2 Earnings Preview 2011

JPMorgan Chase & Co. (NYSE: JPM), the second-biggest U.S. bank, is scheduled to release its second-quarter earnings before the opening bell on Thursday, July 14, 2011. Analysts, on average, expect the company to report earnings of $1.22 per share on revenue of $25.22 billion. In the year ago period, the company reported earnings of $1.09 per share on revenue of $25.61 billion. The company has beaten the street earnings estimate in each of the past four quarters

JPMorgan Chase & Co., a financial holding company, provides various financial services worldwide. JPMorgan Chase’s principal bank subsidiaries are JPMorgan Chase Bank, National Association (JPMorgan Chase Bank, N.A.), a national banking association with United States branches in 23 states, and Chase Bank USA, National Association (Chase Bank USA, N.A.), a national banking association that is the Firm’s credit card-issuing bank. It operates in six segments: Investment Bank, Commercial Banking, Treasury & Securities Services, Asset Management, Retail Financial Services, and Card Services. J.P. Morgan is the first major U.S. bank to report first-quarter results.

In the preceding first quarter, the New York-based company's net income was $5.6 billion, compared to $1.28 a share, from $3.3 billion, or 74 cents a share, in the year-earlier quarter. Revenue declined to $25.2 billion from $27.7 billion. Analysts, on average, expected the company to earnings of $1.15 a share on revenue of $25.2 billion. also increased its quarterly dividend to 25 cents a share from 5 cents a share.. 

The company has benefited from continued credit improvement, return to positive loan growth and a recovery in mergers and acquisitions and other investment-banking businesses like underwriting equity and debt offerings. 

The company is a big player in all major banking businesses, including investment banking and trading, retail banking, credit cards, mortgages, commercial lending, treasury and securities services and asset management.

The New-York bank remained in the top spot in global investment-banking revenue for the first half of the year, according to data-provider Dealogic's preliminary count of the first two quarters. The company raked in $3.33 billion in revenue from activities including capital markets, merger-and-acquisition advice and syndicated lending. That sum was a 39% increase from the first half of 2010, giving J.P. Morgan 8.7% of the global market, according to Dealogic. 

The financial giant's plans to maintain its prime spot are concentrated on international growth. The bank wants to expand overseas and better link its commercial bank and payments businesses to the securities unit in order to sell more services to multinationals.

The company recently agreed to pay $228 million to federal and state regulators to settle charges that its J.P. Morgan Securities unit fraudulently rigged at least 93 municipal bond reinvestment transactions in 31 states, generating millions of dollars in ill-gotten gains. .

The company's stock currently trades at a forward P/E (fye Dec 31, 2012) of 7.24 and PEG Ratio (5 yr expected) of 0.79. 

Full Disclosure: None.
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