Monday, January 23, 2012

JPMorgan Financial Results Decline: EPS at 7-Quarter Low

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JPMorgan Financial Results Decline: EPS at 7-Quarter Low


JPMorgan Summary Q4 2011 JP Morgan's Q4 2011 financial results declined both QoQ and YoY. JPMorgan has definitely rebounded from the depths of the Great Recession and USA Financial System Crisis in 2008 and 2009, has adequate capital, and is profitable. A decrease in noninterest revenues resulted in the drop in financial performance and offset an impressive decrease in operating expenses (noninterest expense). Trading income, mortgage fees, and other fees and income were the cause of the decline in noninterest revenues. Core banking results, reflected in net interest income, are good. Annual return on assets are a respectable +0.85%, but decreasing. Whether financial performance can be accelerated anytime soon is the question and unknown. CEO Jamie Dimon was frank and admitted financial performance was "modestly disappointing".


JPMorgan Income Statement Q4 2011 Financial performance declined QoQ and YoY, but is adequate. Q4 2011 Net Revenues were $21.47B, Net Income was $3.73B, and Earnings Per Share was $0.90. For QoQ, these were down -9.65%, -12.53%, and -11.76%, respectively. For YoY, these were down -17.73%, -22.83%, and -19.64%, respectively. Both the Operating Margin of 22.11% and Net Margin of 17.36% declined QoQ and YoY. The operating expense ratio of 59.60% increased QoQ and YoY and continues too high.


JPMorgan Balance Sheet Q4 2011 Overall financial position is adequate and slightly stronger QoQ and slightly weaker YoY. JPMorgan's "fortress balance sheet" of $2.266 trillion in total assets maintains an adequate capital ratio of 8.10% and adequate Tier 1 Capital and Tier 1 Common ratios of 12.3% and 10.00%, respectively. Total assets were down -1.02% QoQ. Return on Assets of 0.85% is adequate and increased YoY but decreased QoQ.


JPMorgan (JPM) Rating Q4 2011 At December 31, 2011, we have rated JPMorgan Chase & Co. a "D", up from "F" at September 30, 2011. Financial position is adequate and has slightly strengthened by reduction in total assets and increase in total equity. Financial performance continues adequate but has slightly declined. Our rating weights financial position more than financial performance and emphasizes safety and soundness, not future earnings potential. Ratings range from A+ down through G-.


JPMorgan Financial Performance by the Quarters JPMorgan Earnings Per Share Current Earnings Per Share of $0.90 is -11.76% QoQ, -19.64% YoY, and a 7-quarter low. The EPS chart average is $0.76.

 


JPMorgan Net Revenues, Operating Income, and Net Income Consolidated revenues are reported net of interest expense as Net Revenues. Current Net Revenues of $21.47B are -9.65% QoQ, -17.73% YoY, and a 12-quarter low. Current Operating Income of $4.75B is a 7-quarter low. Current Net Income of $3.73B is -12.53% QoQ, -22.83% YoY, and a 7-quarter low. The chart averages for NR, OI, and NI are $21.47B, $4.39B, and $3.73B, respectively.

 


JPMorgan Operating Margin, Net Margin, and Capital to Assets Ratio Current Operating Margin of 22.11% is a 7-quarter low. Current Net Margin of 17.36% is also a 7-quarter low. Current Capital-to-Assets ratio (Capital Ratio) of 8.10% is adequate. The current Tier 1 Capital and Common Ratios are 12.3% and 10.9%, respectively, which are adequate. The chart averages for OM, NM, and CR are 18.08%, 14.25%, and 7.89%, respectively.

 


JPMorgan Return on Assets Current Return on Assets of +0.85% is respectable, but a 4-quarter low. The ROA chart average is +0.64%.

 


JPMorgan Income Statement Components Current NonInterest Expense, operating expenses, of $14.54B is a 6-quarter low. Current Net Interest Income of $12.13B is a 5-quarter high. Current NonInterest Revenue of $9.34B is a 12-quarter low. Current Provision for Credit Losses of $2.18B is a 2-quarter low. The chart averages for NIE, NII, NIR, and PCL are $13.57B, $11.52B, $11.13B, and $4.69B, respectively.

 


JPMorgan Growth Rates Current Net Revenues Growth Rate of -17.73% is a multi-quarter low. The NRGR chart average is -3.00%. Current Earnings per Share Growth Rate of -19.64% is a multi-quarter low. The EPSGR chart average is +24.23%.

 


JPMorgan Operating Expense Ratio Current Operating Expense Ratio of 59.60% is a multi-year high. The OER chart average is 52.93%.

 

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