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J.P. Morgan Chase

(JPM) - Get JPMorgan Chase & Co. (JPM) Report

saw its first-quarter earnings dragged down by bad loans, Argentina's financial turmoil and bad private equity investments, although the No. 2 U.S. bank still beat analysts' consensus earnings estimates.

The company said it earned $1.15 billion, or 57 cents a share, in the first quarter, compared with $1.53 billion, or 74 cents a share, in the year-earlier quarter. The average estimate of analysts polled by First Call was for earnings of 53 cents. The latest quarter results include a 12-cent loss from JPMorgan Partners, its private equity arm.

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Like most banks in the first quarter, J.P. Morgan benefited from strong retail lending and consumer credit results. The company's "retail and middle-market" segment posted operating revenue of $3.13 billion and operating income of $526 million, up 7% and 25% from a year ago, respectively.

The company ran into trouble with its investment banking operations, where operating earnings were $755 million, down 27% from a year ago. The result was an improvement from the fourth quarter. Operating revenue of $3.62 billion in the first quarter of 2002 was up 17% from the fourth quarter but down 16% from the first.

Investment banking fees totaled $741 million in the first quarter, declining 21% both sequentially and year-over-year. The falloff reflected continued weakness in M&A and equity underwriting markets as well as lower loan syndication activity during the quarter.

Commercial net charge-offs in the first quarter of 2002 were $320 million, compared to $433 million in 2001's fourth quarter and $148 million in the first quarter of 2001. Consumer net charge-offs on a managed basis were $754 million, up from $649 million in the fourth quarter of 2001 and $540 million in the first quarter of 2001.