JPMorgan is scheduled to report first quarter 2014 earnings on April 11. Analysts’ consensus estimate* is for earnings per share of $1.41 and revenue of $24.53 billion. Earnings per share for first quarter 2013 were $1.59 and revenue was $24.51 billion.
JPMorgan will be the first financial company in the Dow Jones Industrial Average to report first quarter 2014 earnings. Analysts have been reducing their earnings expectations for the first quarter overall and financial stocks specifically have seen earnings estimates revised downward.
Federal Reserve stress test results were released by the Federal Reserve on March 26 and spotlighted in the first quarter for financials stocks. While results from the Federal Reserve’s stress test were basically positive, banks overall still continue to struggle with litigation and mortgage lending restrictions which have led to the downward revisions in earnings expectations.
In JPMorgan’s February 25 Investor Day presentation it highlighted some of its key areas of legal and regulatory focus. The company’s legal and regulatory focus areas were noted in the company’s capital infrastructure plan, primarily resulting from the Federal Reserve’s guidance on capital planning.
The Investor Day presentation also discussed the company’s continued strengths in its four business segments: Consumer and Community Banking, Corporate and Investment Banking, Commercial Banking and Asset Management.
Other first quarter 2014 company news included the following:
- JPMorgan announced a dividend payment of $0.38 per share and increased its quarterly dividend to $0.40 per share.
- The company announced its plans to repurchase $6.5 billion of common equity.
- JPMorgan announced the sale of its physical commodities business for $3.5 billion.
- JPMorgan reached a settlement with various regulators requiring it to pay $614 million and improve its lending standards for loans within the FHA's Direct Endorsement Lender program.
- Mike Cavanagh, Co-CEO of Corporate and Investment Banking (CIB) announced his departure from the firm leaving Daniel Pinto to manage the entire CIB division.
In the first quarter the stock price traded within a range of $53.97 to $60.69. Based on basic discounted cash flow calculations it has an intrinsic value of $61.32 just above its current price of $58.85. While the company continues to be a leading stock investment in the financial industry because of its advancements in capital infrastructure planning and market positioning in core banking segments its growth potential is still unpredictable. On-target first quarter 2014 earnings could help strengthen the company’s near-term outlook, but it still operates in a financial services industry with a number of regulatory sector risks.
* Earnings estimate data obtained from Yahoo Finance.