JPMorgan kicks off bank earnings with revenue miss

JPMorgan Chase kicked off earnings seasons for banks Tuesday with revenue that fell short of Wall Street’s expectation due to market volatility that rocked investors’ confidence in August and September.

The New York bank warned fourth-quarter revenue could be lower than expected due to continued fallout from the trading rout, which has led professional investor clients to step back from trading in certain asset classes.

“Volatility is our friend. We were able to capitalize on that,” Chief Financial Officer Marianne Lake said in a conference call. But it was “tougher to make money in (fixed-income) and commodities where clients were much less active,” she said.

Lake also suggested Wall Street analysts lower their fourth-quarter estimates as trading has remained slow. “Analysts’ estimates appear high,” she said.

JPMorgan shares, which lost 0.3% to $61.55 in regular trading, fell another 1.4% after hours.

The company earned $6.8 billion, or $1.68 a share, in the three months ended in September, which was better than Wall Street expected. But its quarterly revenue of $23.5 billion fell short of analysts’ expectations for revenue of $24 billion, according to research firm FactSet.

The bank’s earnings got a $2.2 billion boost from tax benefits and other write-offs. Excluding one-time items, JPMorgan earned $5.4 billion, or $1.32 a share.

Wall Street analysts expect all the big banks, except for Wells Fargo, to report lower revenue this quarter than they did last year, according to data from FactSet. Bank of America and Wells Fargo report third-quarter earnings Wednesday. Citigroup and Goldman report on Thursday.