J.P. Morgan Chase said Thursday that its fourth-quarter profit fell 77.6%. This should not be a supprise to anyone with the take overs of the failed Bear Sterns & Washinton Mutual.
A $1.1 billion benefit from merger-related items helped the firm post a $702 million, or 7 cents a share, fourth-quarter profit, compared to a profit of $3 billion, or 86 cents a share, in the year-ago period. Chase total net revenue dipped to $17.23 billion in the quarter, from $17.38 billion last year. Some Analysts had expected the company to break even on revenue of $18.83 billion. Analysts at FactSet had expected the company to report a 7 cents a share profit.
JP Morgan Chase CEO Jamie Dimon said in a press release “Our fourth-quarter financial results were very disappointing, driven by a loss in investment banking largely attributable to continued markdowns on leveraged loans and mortgage trading positions, as well as weak trading results. We also faced higher credit costs associated with continued deterioration across our loan portfolios, including a $4.1 billion addition to loan loss reserves.”
J.P. Morgan shares initially rose in pre-open trading, but slipped back, falling 2.5%, to $25.25 in recent action. J.P. Morgan had originally planned to report earnings next week, but moved that date up, making it the first of the major banks and S&P 500 financial stocks to post fourth-quarter earnings.