So JP Morgan didn’t move up its earnings report because it had some horrible news that it just wanted to get out into the open. In fact, by posting a tiny profit the company beat Wall Street estimates, and its stock is up modestly in early action. Helped by $1.1 billion in merger-related benefits, the company earned $702 million in the quarter or $.07. Analysts had been looking for a breakeven number.
Here’s how Jamie Dimon described the quarter:
“Our fourth-quarter financial results were very disappointing, driven by a loss in Investment Banking largely attributable to continued markdowns on leveraged loans and mortgage trading positions, as well as weak trading results. We also faced higher credit costs associated with continued deterioration across our loan portfolios, including a $4.1 billion addition to loan loss reserves. However, we continued to see underlying growth in many business areas. The integration of our recently-acquired Washington Mutual franchise has progressed well, and we continued to grow in Treasury & Securities Services and Commercial Banking. We also opened millions of new checking and credit card accounts, experienced net inflows in assets under management, and gained Investment Banking market share in all major fee categories.”
Looking ahead to 2009, Dimon continued: “If the economic environment deteriorates further, which is a distinct possibility, it is reasonable to expect additional negative impact on our market-related businesses, continued higher loan losses and increases to our credit reserves.“
Shares are up about 2% pre-market, though we wouldn’t be surprised if that changed after investors have more time to digest the news. The market futures are also moving up on the news.
Update: In fact, by 7:10, the stock has given up its gains as we thought it might. Overall, there’s very little to like in this report.