Big Banks Post Mixed Third Quarter as JPMorgan Misses and Goldman Soars
NEW YORK — Four of the nation’s largest banks opened earnings season Tuesday with a split verdict: a rare miss at JPMorgan Chase, a blowout at Goldman Sachs, a solid beat at Citigroup and a mixed report from Wells Fargo.
JPMorgan, the country’s biggest bank, reported earnings of $5.57 a share, below the roughly $5.90 analysts expected, on revenue that also fell short of forecasts, the New York Post reported. Net income still rose 6 percent from a year earlier to $15.3 billion, Barron’s reported, and the stock reversed an early decline to close up 0.7 percent.
Trading was the weak spot. Fixed-income trading revenue fell 4 percent from the second quarter while equities trading revenue jumped 49 percent, the Wall Street Journal reported, and a $658 million loss on investment securities weighed on the bottom line.
Chief executive Jamie Dimon offered a steady view of the economy but a sharp warning on rates. “The U.S. economy continued to be fueled by strong business investment and ongoing consumer spending,” he said, while cautioning that financial pain across the country would deepen if interest rates climb another percentage point, the Post reported. Traders broadly expect the Federal Reserve to raise rates again in December.
Goldman Sachs was the day’s standout. The bank posted $18.68 billion in revenue, its second-best quarter ever, the Journal reported, powered by a 72 percent surge in equities trading revenue to $6.44 billion. Its global banking and markets revenue jumped 32 percent to $13.46 billion, well above the $11.86 billion consensus, Barron’s reported. Shares rose 1.1 percent.
Citigroup topped forecasts, earning $2.85 a share against estimates of about $2.66, with revenue of $23.85 billion, its best third quarter in a decade, the Journal reported. Net income jumped 40 percent to $5.2 billion, though the stock slipped 0.4 percent.
Wells Fargo split the difference. Earnings of $1.87 a share edged past the $1.85 estimate, but revenue of $21.87 billion missed forecasts, and net interest income of $12.52 billion came in below the $12.66 billion analysts expected, a key gauge of lending profitability, Barron’s reported. The stock fell 1.3 percent.
The results land against a tougher backdrop than last quarter. Analysts grew cautious late in the quarter as Treasury yields climbed and deal-making slowed, and bank stocks have lagged over the past three months, Investor’s Business Daily reported. Bank of America and Morgan Stanley report Wednesday, the same morning the consumer price index lands.