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Tale of the Tape

Zacks Equity Research

JPMorgan (JPM) Tops Q3 Earnings & Revenue Estimates
October 14, 2016


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Have you been eager to see how JPMorgan Chase & Co. (JPM - Analyst Report) performed in Q3 in comparison with the market expectations? Let’s quickly scan through the key facts from this New York-based major global bank’s earnings release this morning:

An Earnings Beat

JPMorgan came out with earnings of $1.58 per share, which beat the Zacks Consensus Estimate of $1.40. Earnings in the reported quarter include $71 million of legal benefit.

Lower operating expenses and improved revenues primarily led to earnings beat.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for JPMorgan depicted optimism prior to the earnings release. The Zacks Consensus Estimate rose over the last 30 days.

Further, JPMorgan have a decent earnings surprise history. Before posting the earnings beat in Q3, the company delivered three positive surprises in the prior four quarters, as shown in the chart below:

JPMORGAN CHASE Price and EPS Surprise



Overall, the company has a positive earnings surprise of 4.6% in the trailing four quarters.

Revenue Higher Than Expected

JPMorgan recorded revenues of $25.5 billion, which was ahead the Zacks Consensus Estimate of $24.0 billion. Also, it compared favorably with the year-ago number of $23.5 billion.

Key Developments to Note:


  • Provisions for credit losses increased 86% year over year
  • Returned nearly $3.8 billion to shareholders through dividends and share buybacks
  • Average Core loans up 19% year over year
  • Basel III common equity Tier 1 ratio of 11.9%, as of Sep 30, 2016

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #2 (Buy) for JPMorgan. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

How the Market Reacted So Far

Following the earnings release, JPMorgan shares were up nearly 2% in the pre-trading session. This is in contrary to what the stock witnessed in the prior-day’s session. Clearly, the initial reaction shows that the investors have considered the results in their favor. However, the full-session’s price movement may indicate a different picture.

Check back later for our full write up on this JPMorgan earnings report!

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