J.P. Morgan Chase
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.
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.