JPMorgan reports better earnings than expected, CEO says US “housing market has turned the corner”

Jamie Dimon is all smiles
Jamie Dimon is all smiles
Image: Getty Images / Chip Somodevilla
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JPMorgan Chase & Co. reported earnings of $1.40 per share and revenues of $25.8 billion in the third quarter, beating analysts expectations. The company’s profits rose 34%. CEO Jamie Dimon credits some of the bank’s successes to the US housing market, which he says “has turned the corner.”

JPMorgan says that it saw mortgage loan originations rise $47.2 billion, up 29% from a year ago, just as analysts began to cautiously call a housing bottom. Real estate portfolios also saw a net income of $60 million, as opposed to losses of $67 million in third quarter 2011. Nonetheless, the bank said it remains wary of “default-related expenses,” likely costs associated with new foreclosures as an inventory of old homes moves to the markets.

Dimon’s call on housing appears to have stolen some of the limelight from a trading scandal that hit the company’s profits earlier in the year. A powerful trader—now known to the world as the “London Whale”—managed to amass a multibillion-dollar trading loss after placing a bad bet on corporate credit default swaps (CDS). The bank initially estimated that it had lost $2 billion, but later revised that estimate to $5.8 billion. In its last earnings report, JPMorgan admitted those losses could grow by another $1.7 billion as it unwound the losing position.

As the United States’ largest bank, JPMorgan’s earnings are often seen as a bellwether for American investment bank earnings. Earnings season in the US unofficially began with the release of aluminum producer Alcoa Inc.’s better than expected earnings last week. Analysts expected JPMorgan would post earnings of $1.21 per share for the quarter, with revenues of $24.42 billion.

Read the full press release on earnings from BusinessWire.