JPMorgan Chase & Co. (NYSE:JPM) will host a conference call to review first quarter 2014 financial results on Friday, April 11, 2014 at 8:30a.m. (Eastern). The results are scheduled to be released at 7:00a.m. (Eastern).
Wall Street anticipates that money center will earn $1.41 per share for the quarter, which is $0.18 less than last year's profit of $1.59 per share. iStock expects JPM to miss Wall Street's consensus number. The iEstimate is $1.40, a penny less than expected; however, there could be some additional downside as the consensus within the last 30-days is $1.31 according to Zacks.com.
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Sales, like earnings, are expected to slip, dropping 5% year-over-year (YoY). JPMorgan Chase's consensus revenue estimate for Q1 is $24.56 billion, lower than last year's $25.85 billion.
JPMorgan Chase & Co. is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands.
While the last 30-day outlook is underwater, analysts are mixed on Friday's results. Five analysts reduced their view in the last 30 days, and five raised their estimates during the same timeframe with two of the five in the last week. The estimate, however, has drifted lower during the quarter, starting at $1.49, then $1.48, then $1.43 and now $1.41.
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Missing earnings would be something rare for the 215 year-old company. The Dow member has topped the street's consensus 19 of the last 20 quarterly checkups; so, we are out on a limb with the iEstimate.
However, we may not be that far off as a ton of new regulations for 2014 kicked in and require investments i.e. costs in the form of personnel and technology, not to mention all the fines JPM has faced.
In his letter to shareholders, Jamie Dimon, chief executive of JPMorgan Chase, wrote, "If you have to hold higher capital and higher liquidity and some of your costs are higher – all things being equal – your returns will obviously come down." He says the effects could substantially reduce performance and market returns for many banks.
Investors will want to know what the impact on JPM will be for 2014 and beyond.
On a more positive note, JPM upped its quarterly dividend for Q2 to $0.40 per share from $0.38 and authorized a share repurchase plan totaling $6.5 billion. The return of capital to shareholder could offset some of the negatives associated with the global regulatory environment.
Overall: JPMorgan Chase & Co. (NYSE:JPM) history suggests a bullish surprise; however, the iEstimate disagrees and recent estimates say something different. Either way, JPM's recent, post-EPS price-sensitivity shows remarkably little reaction to the quarterly profit review. In all likelihood, the tenor of Wall Street's reaction will be tied to the costs associated with complying with new regulations. Mr. Dimon has already said it could result in higher fees for customers, which usually don't go over too well – remember the ATM fee uproar? If JPM is unable to pass along higher costs to customers, then margins and the stock get hit, but that's probably a Q2/Q3 issue.
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