JPMorgan Chase Braces for 'Noisy' Quarter

In two weeks, investors will look under the hood of JPMorgan Chase (JPM Quote) to see how the big bank fared in its first full quarter since it acquired failed thrift Washington Mutual.

JPMorgan Chase has thus far largely skirted big losses from the credit crisis, but the bank is expected to reveal that it succumbed to the difficult environment that has hit many of its peers when it unveils fourth-quarter results on Jan. 21. Analysts on average expect the bank to post earnings of just 6 cents a share, according to Thomson Reuters. In the year ago quarter, JPMorgan Chase made 86 cents a share.

"It's going to be an incredibly noisy quarter again," says Jaime Peters, an analyst at Morningstar. JPMorgan Chase is "the most realistic of banks. They haven't tried to paint rosy pictures. I would expect more candid answers of what they're seeing in the economy and what they think the future will hold" for both the company and banking industry in general, she says.

"If you look at the big four, the only other company that hasn't digested somebody is Citigroup (C Quote), which has significant problems of their own," Peters says. "It's going to be a little tough to compare the banks head-to-head this quarter. At the same time, when you start going down to the fundamentals, it will be interesting to see who is holding up a little bit more and who is not."

Oppenheimer analyst Meredith Whitney in a Jan. 6 industry note predicts JPMorgan Chase will write down $3.4 billion in the fourth quarter and will increase its fourth-quarter loan-loss provision some 145% to $6.2 billion for losses, up from $2.5 billion in the year earlier quarter. That would be the largest provision increase among the big banks like Bank of America (BAC Quote), Wells Fargo (WFC Quote) and Citi, she said.