JP Morgan Gains on Beating Earnings Estimates

J.P. Morgan Chase (NYSE:JPM) posted profit and revenue that smashed through analysts’ expectations on a strong rebound in trading revenue at the end of 2019.

The bank said Tuesday that fourth-quarter profit rose 21% to $8.52 billion, or $2.57 a share, compared with the $2.35 estimate of analysts.

Managed revenue climbed 9% to $29.2 billion, compared with the $27.94 billion estimate.

CEO Jamie Dimon said the investment bank produced record revenue for a fourth quarter, aided by the rebound in trading revenue from a challenging period a year ago. The strong results in trading helped offset the impact of compressed margins across retail and commercial banking businesses as interest rates dropped.

Profit in the investment bank surged 48% to $2.9 billion, mainly on trading and sales. Bond trading revenue surged 86% to $3.4 billion, exceeding the $2.61 billion estimate by roughly $800 million, as fixed-income desks were humming, particularly in securitized products and rates.

Stock traders posted a 15% increase in revenue to $1.5 billion, compared with the $1.35 billion estimate.

In the firm’s huge retail banking division, fourth-quarter profit rose 5% to $4.2 billion.

The firm’s commercial bank posted a 9% drop in profit to $938 million as lower net interest income compressed margins and the bank boosted its provision for credit losses. Asset and wealth management posted a 30% increase in profit to $785 million as rising asset levels boosted results.

Shares improved in price $2.88, or 2.1%, to $140.03