Another bank skates by without an earnings surprise due to subprime credit losses. Representing JPMorgan's "second consecutive big beat" of Wall Street estimates, the bank posted a 20% gain on net income in Q2 to $4.2 billion, beating estimates by 10%. Quarterly revenue increased 25% over last year to $18.9 billion.
Surges in investment banking, asset management and private equity drove the quarterly gains. Investment banking experienced a revenue gain of 34% to $5.8 billion and a net income gain of 41% to $1.2 billion. Asset management saw a 32% jump in revenue to $2.1 billion and a 44% jump in net income to $0.5 billion. Private equity gains more than doubled from $0.5 billion to $1.3 billion.
JPMorgan's retail bank was hurt by weakness in home equity lending and saw an earnings dip of 10% on a revenue gain of 15%. The credit-card arm was similarly impacted, losing 13% in net income on a 1% revenue gain.
Shares of JPMorgan (NYSE: JPM) are down over 2% so far in daily trading.
J.P. Morgan Net Rises 20% On Private-Equity Gains [Wall Street Journal]