JPMorgan Chase Q3 earnings beat consensus, net interest income guidance raised

JPMorgan Chase (NYSE:JPM) stock gained 1.6% in Friday premarket trading after the biggest U.S. bank by assets increased its net interest income guidance for the year and turned in better-than-expected Q3 earnings.

Q3 net interest income exceeded the Wall Street estimate, but the bank’s provision for credit losses also came in higher than expected.

The company now expects 2024 net interest income, excluding markets, of ~$91.5B vs. $90.8B Visible Alpha consensus and the ~$91B guidance the bank gave in July.

Guidance for 2024 adjusted expense now stands at ~$91.5B, market dependent, vs. the ~$92B guidance it previously issued. Card services net charge-off rate is expected to be ~3.4%, unchanged from prior guidance.

Q3 GAAP EPS of $4.37, topping the average analyst estimate of $3.98, declined from $6.12 in Q2 and increased from $4.33 in Q3 2023.

Adjusted revenue of $43.3B dropped from $51.0B in the previous quarter and climbed from $40.7B a year ago.

“In the CIB (Commercial & Investment Bank), investment banking fees grew 31%, while Markets revenue was resilient, rising 8%,” said Chairman and CEO Jamie Dimon. “Payments fees grew by double-digits as investments are fueling organic growth.”

Provision for credit losses was $3.11B, vs. the Visible Alpha consensus of $3.04B, rose from $3.05B in Q2 and $1.38B in Q3 2023.

Net interest income of $23.4B, vs. the $22.7B Visible Alpha consensus, climbed from $22.7B in the previous quarter and $22.7B in the year-ago period.

JPMorgan Chase’s (JPM) total loans at Sept. 30, 2024, rose to $1.34T from $1.32T at June 30. Deposits, at $2.43T, increased from $2.40T at the end of Q2.

Q3 noninterest expense of $22.6B fell from $23.7B in the previous quarter and rose from $21.8B a year ago.

“JPMorgan’s Q3 performance showed promising signs despite a 2% Y-Y dip in net income. Strong non-interest income growth and the rise in net interest income suggest JPM is firing on all cylinders, aided by elevated interest rates,” said SA Analyst Dilantha De Silva. “However, the substantial increase in provisions for credit losses – up from $1.31B a year ago to $3.1B – signals expectations for macroeconomic and geopolitical headwinds that may impact earnings growth in the next few quarters.”

Q3 revenue and net income by segment:

Consumer & Community Banking revenue of $17.8B rose 1% Q/Q and declined 3% Y/Y; net income of $4.05B dropped 4% Q/Q and 31% Y/Y. Provision for credit losses was $2.80B, up 6% Q/Q and 93% Y/Y.

Commercial & Investment Bank revenue of $17.0B slipped 5% Q/Q and increased 8% Y/Y; net income of $5.69B fell 3% Q/Q and climbed 13% Y/Y.

Investment Banking revenue of $2.4B jumped 29% Y/Y Markets & Securities Services revenue of $8.37B grew 8% from last year’s Q3. Markets revenue of $7.2B increased 8% Y/Y. Fixed Income Markets revenue of $4.5B was flat. Equity Markets revenue of $2.6B jumped 27%.

Asset & Wealth Management revenue of $5.44B rose 4% Q/Q and 9% Y/Y; net income of $1.35B increased 7% Q/Q and dipped 5% Y/Y.

Conference call at 8:30 AM ET.

Earlier, JPMorgan Chase GAAP EPS of $4.37 beats by $0.39, revenue of $42.65B beats by $1.27B