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J.P. Morgan Chase Earnings Below Expectations

Earnings Scorecard
Estimated* Actual Year-Ago
$0.45 $0.37 $1.09

J.P. Morgan Chase (JPM) said operating profit sank 65% in the latest quarter, roughly in line with the company's December guidance .

Fourth-quarter earnings were 37 cents a share, down from $1.09 a share in the year-ago period, as losses on venture capital investments and a slowdown in trading revenues weighed on the newly merged firm. The consensus estimate from First Call/Thomson Financial was for 45 cents. Operating income was $763 million, down sharply from $2.2 billion in the prior year.

Like a number of other firms with investment banking operations, J.P. Morgan Chase has felt the impact of a slowdown in capital markets activity and underwriting opportunities. In addition, its venture capital arm uses an accounting method that is more sensitive to fluctuations in market value. The unit, now known as J.P. Morgan Partners had a loss of $92 million in private equity investments in the latest quarter.

The bank also took a merger charge of $1.25 billion, and also took $1.23 billion in one-time gains. Including these items, the bank earned 34 cents a share compared with a pro forma $1.10 in the year-ago period.

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