UPDATE: JPMorgan Chase (JPM) Posts Q2 EPS of $1.21; CIO No Longer to Trade Synthetic Credit Portfolio
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(Updated - July 13, 2012 6:58 AM EDT)
JPMorgan Chase & Co. (NYSE: JPM) reported Q2 EPS of $1.21, which may not compare with the analyst estimate of $0.72. Revs were $22.89 billion, versus the consensus of $21.90 billion.
Includes $0.69 post-tax reduction from CIO trading losses and $0.16 benefit from securities gains in CIO unit.
Other EPS adjustments:
CEO Jamie Dimon commented, "Since the end of the first quarter, we have significantly reduced the total synthetic credit risk in CIO - whether measured by notional amounts, stress testing or other statistical methods. The reduction in risk has brought the portfolio to a scale that allowed us to transfer substantially all remaining synthetic credit positions to the Investment Bank . The Investment Bank has the expertise, capacity, trading platforms and market franchise to effectively manage these positions and maximize economic value going forward. As a result of the transfer, the Investment Bank's Value-at-Risk and Risk Weighted Assets will increase, but we believe they will come down over time. Importantly, we have put most of this problem behind us and we can now focus our full energy on what we do best - serving our clients and communities around the world.
CIO will no longer trade a synthetic credit portfolio and will focus on its core mandate of conservatively investing excess deposits to earn a fair return. CIO's $323 billion available-for-sale portfolio had $7.9 billion of net unrealized gains at the end of the quarter. This portfolio has an average rating of AA+, has a current yield of approximately 2.6%, and is positioned to help to protect the Firm against rapidly rising interest rates. In addition to CIO, we have $175 billion in cash and deposits, primarily invested at central banks."
For earnings history and earnings-related data on JPMorgan Chase & Co. (JPM) click here.
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JPMorgan Chase & Co. (NYSE: JPM) reported Q2 EPS of $1.21, which may not compare with the analyst estimate of $0.72. Revs were $22.89 billion, versus the consensus of $21.90 billion.
Includes $0.69 post-tax reduction from CIO trading losses and $0.16 benefit from securities gains in CIO unit.
Other EPS adjustments:
- $2.1 billion pretax benefit ($0.33 per share after-tax increase in earnings) from reduced loan loss reserves, mostly mortgage and credit card
- $0.8 billion pretax gain ($0.12 per share after-tax increase in earnings) from debit valuation adjustments in the Investment Bank
- $0.5 billion pretax gain ($0.09 per share after-tax increase in earnings) reflecting expected full recovery on a Bear Stearns-related first-loss note in Corporate
CEO Jamie Dimon commented, "Since the end of the first quarter, we have significantly reduced the total synthetic credit risk in CIO - whether measured by notional amounts, stress testing or other statistical methods. The reduction in risk has brought the portfolio to a scale that allowed us to transfer substantially all remaining synthetic credit positions to the Investment Bank . The Investment Bank has the expertise, capacity, trading platforms and market franchise to effectively manage these positions and maximize economic value going forward. As a result of the transfer, the Investment Bank's Value-at-Risk and Risk Weighted Assets will increase, but we believe they will come down over time. Importantly, we have put most of this problem behind us and we can now focus our full energy on what we do best - serving our clients and communities around the world.
CIO will no longer trade a synthetic credit portfolio and will focus on its core mandate of conservatively investing excess deposits to earn a fair return. CIO's $323 billion available-for-sale portfolio had $7.9 billion of net unrealized gains at the end of the quarter. This portfolio has an average rating of AA+, has a current yield of approximately 2.6%, and is positioned to help to protect the Firm against rapidly rising interest rates. In addition to CIO, we have $175 billion in cash and deposits, primarily invested at central banks."
For earnings history and earnings-related data on JPMorgan Chase & Co. (JPM) click here.
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