J.P. Morgan Chase (NYSE:JPM) on Tuesday reported earnings that exceeded analysts’ expectations, aided by an income tax benefit that boosted results by $768 million.
The bank posted a record second-quarter profit of $9.65 billion, 16% higher than a year earlier, or $2.82 a share, beating the $2.50 estimate of analysts. Revenue of $29.57 billion was 4% higher than a year earlier and edged out expectations of $28.9 billion.
Morgan said that the presumably one-time tax boost came from the resolution of "certain tax audits" that lifted the company’s per share earnings by 23 cents.
The bank cut its forecast for 2019 net interest income — a main driver of bank profits — by $500 million to $57.5 billion, compared with the $58 billion target in the previous quarter’s presentation.
The Federal Reserve has signaled that it is preparing to cut its benchmark interest rate later this month, a move that could compress margins on banks’ core lending businesses. Analysts will be keen to ask J.P. Morgan executives how that will impact results in 2019 and beyond.
The bank posted record profits in the first and second quarters of this year, helped by higher interest rates -- the last hike was in December -- that boosted results in the firm’s retail banking operations.
The bank’s fixed income trading division produced $3.69 billion in revenue, a 7% increase that exceeded the $3.36 billion estimate.
Meanwhile, its equities trading business generated $1.73 billion in revenue, a 12% drop that missed analysts’ $1.84 billion estimate.
Shares docked nine cents to $113.78
