JPMorgan Chase beats earnings expectations but the stock falls on interest income outlook

The banking giant reported $41.9 billion revenues in the first quarter of 2024, up 9% from the same period last year and topping analysts’ projected $41.674 billion. JPMorgan also posted earnings per share (EPS) of $4.44, surpassing the $4.17 expected by analysts, according to estimates compiled by FactSet. In the first quarter of 2023, the bank saw earnings of $4.10 per share.

Net income came in at $13.4 billion, up 6% from $12.6 billion during the same period last year. The bank took a $725 million charge related to the Federal Deposit Insurance Corporation’s special assessment aimed at recovering losses following the collapses of Silicon Valley Bank and Signature Bank last year.

JPMorgan stock was down about 5% in midday trading on Friday after the bank gave somewhat downbeat guidance on its net interest income for the remainder of 2024. The stock is up about 7% so far this year and almost 44% over the last 12 months.

Citigroup $C and Wells Fargo $WFC all beat Wall Street expectations when they reported quarterly earnings Friday morning, but their stocks also fell.

Despite the strong results and favorable economic conditions, JPMorgan CEO Jamie Dimon said Friday that the bank remains “alert to a number of significant uncertain forces.”

“First, the global landscape is unsettling — terrible wars and violence continue to cause suffering, and geopolitical tensions are growing,” he said in the earnings report. “Second, there seems to be a large number of persistent inflationary pressures, which may likely continue. And finally, we have never truly experienced the full effect of quantitative tightening on this scale.”

“We do not know how these factors will play out,” he added, “but we must prepare the Firm for a wide range of potential environments to ensure that we can consistently be there for clients.”

Read more: Jamie Dimon says don’t be surprised if the economy hits a wall

The bank’s net interest income (NII) was buoyed into this year, coming in at $23.2 billion in the first quarter — up 11%, or up 5% excluding First Republic. NII gave JPMorgan and other major banks’ earnings a boost in 2023, following a period of consecutive rate hikes carried out by the Federal Reserve. But the metric is largely anticipated to dip this year as the “higher-for-longer” rates will begin to weigh on margins.

“The firm’s economies of scale and the diversification of its business mix protects bondholders and leaves the bank in a robust position to navigate geopolitical, economic and other uncertainties,” Peter Nerby, a senior vice president at Moody’s Ratings, said in a statement Friday.

The bank has solidified its place as the largest in the U.S., with $3.6 trillion assets under management — a 19% year-over-year increase.

The company last month announced a 10% increase to its quarterly common dividend. The $1.15 per-share dividend will be payable to stockholders April 30, the bank said at the time.

JPMorgan is coming off of a red hot 2023. The largest U.S. bank by assets saw $49.6 billion in profits last year, including a $4.1 billion windfall from its acquisition of First Republic Bank.

JPMorgan scooped up the San Francisco-based bank last May amid the regional banking crisis.

The bank has undergone some reshuffling over the last few months, giving a number of key executives “new and increased responsibilities” and installing new leadership in its capital markets and investment banking divisions.

In its annual proxy statement, the board of directors said it has been particularly focused on succession planning as it seeks potential replacements for its long-serving CEO. Top contenders for the coveted position include Jennifer Piepszak and Troy Rohrbaugh, the newly appointed co-CEOs of the bank’s expanded commercial and investment bank; Marianne Lake, CEO of consumer and community banking (who oversaw much of the First Republic acquisition); and Mary Erdoes, CEO of asset and wealth management.