JPMorgan Tops Q4 Earnings Estimate, Sees Robust U.S. Consumer in 2020

JPMorgan CEO Jamie Dimon said the U.S. consumer continues to be in a strong position heading into 2020 after his bank topped Street forecasts in a robust fourth quarter earnings report.

JPMorgan Chase & Co.  (JPM) - Get Report posted stronger-than-expected fourth quarter earnings Tuesday, thanks in part to a surge in fixed income trading, and said the U.S. consumer continues to be in a strong position heading into 2020.

JPMorgan said earnings for the three months ending in December came in at $2.57 per share, up 29.8% from the same period last year and well ahead of the Street consensus forecast of $2.35 per share. Group managed revenues, JPMorgan said, rose 9% to $29.2 billion, against topping analysts' forecasts of a $27.96 billion tally.

Total revenues from JPMorgan's markets business rose 56% from last year to $5 billion, the bank said, with equity markets revenue rising 15% to $1.5 billion and fixed income trading revenues surging 78% to $3.4 billion. Net interest income was pegged at $14.3 billion, a 3% slip from last year, while average total loans fell 1%.

 “JPMorgan Chase produced strong results in the fourth quarter of 2019, capping off a solid year for the Firm where we achieved many records, including record revenue and net income," said CEO Jamie Dimon. "While we face a continued high level of complex geopolitical issues, global growth stabilized, albeit at a lower level, and resolution of some trade issues helped support client and market activity towards the end of the year." 

"The U.S. consumer continues to be in a strong position and we see the benefits of this across our consumer businesses," Dimon added.

JPMorgan shares were marked 2.23% higher in following the earnings release to change hands at $140.26 each, a move that would extend the stock's six-month gain to around 23.1%. 

"JPMorgan released a record quarter to finalize a record year, and understandably many are focusing on results in Fixed Income trading, the 9% revenue growth, and how they achieved such profit growth without any tailwind at all from net interest margin" said David Bahnsen, chief investment officer at The Bahnsen Group, which has around $2 billion in assets under management. 

"But we would point back to late 2018 when JPMorgan was raising the dividend 43% despite the then-fears of tightening monetary conditions," he added. "We can never forget that a dividend is management speaking with their actions, not just their words. Dividend growth foreshadows strong operating performance and execution. JPMorgan’s quarter is yet another case in point."

JPMorgan Chase Q4 Earnings graphic