JPMorgan profit falls 3.1%, beats estimates

Written by Bloomberg | Updated: Apr 14 2012, 09:27am hrs
JPMorgan Chase reported a 3.1% drop in earnings, a smaller decline than analysts estimated as mortgage revenue surged and trading almost doubled from the fourth quarter.

First-quarter net income fell to $5.38 billion, or $1.31 a share, from a record $5.56 billion, or $1.28, in the same period a year earlier when there were more shares outstanding, the New York-based company said on Friday in a statement. Per-share profit compared with an average estimate of $1.17 from 28 analysts surveyed by Bloomberg.

JPMorgan, led by chief executive officer Jamie Dimon, 56, benefited from gains in mortgage lending as low interest rates and federal incentive programmes encouraged homeowners to refinance.

Mortgage fees and related revenue totaled $2 billion, compared with a loss of $489 million a year earlier. US lenders made $318 billion in residential mortgages during the first quarter, including $242 billion in refinanced loans, according to the Mortgage Bankers Association.

This is going to be a strong quarter for anyone who has a big mortgage lending or trading business, said Paul Miller, an analyst at FBR Capital Markets, before results were released.

He said expanded federal programmes to aid in refinancings have given the market a boost. It might be the best quarter in a long time.

Profit improved over the fourth quarter, when JPMorgan, the largest US bank, earned $3.73 billion, or 90 cents a share. Still, Dimon warned in the statement that fallout from the housing collapse isnt over. We expect to see elevated levels of costs and losses associated with mortgage-related issues for a while longer, he said.