NEW YORK (CNN/Money) - Bad loans and sluggish trading revenue hurt third-quarter profits at J.P. Morgan Chase as the investment bank Tuesday became the latest high-profile company to say quarterly results will fall short.

The news, released after the closing bell, sent shares of J.P. Morgan, the No. 2 commercial bank, down $1.68, or 8 percent, to $19.87 in after-hours trading, widening their year-to-date loss to 46 percent.

J.P. Morgan warned that third-quarter profits will fall "well below" earnings in the second quarter, when profits were 58 cents a share. Analysts surveyed by First Call had been expecting the company to earn 54 cents a share in the third quarter, on average.

"I am very disappointed with our results and take full responsibility for them," CEO William B. Harrison, Jr, said during a conference call with analysts.

Still, the company stopped short of giving specific third-quarter earnings per share guidance.

Harrison said the loan losses, which are expected to increase by approximately $1 billion, were particularly troublesome because the company had taken steps to cut its exposure to troubled telecom companies.

"In hindsight, we had too much concentration in the telecom space," Harrison said.

J.P. Morgan did not mention WorldCom, Adelphia Communications or Global Crossing, three telecom firms that went bankrupt this year. The company was a lender to Enron, which went bankrupt nine month ago, and Argentina, which defaulted on its debt.

Commercial-credit costs are expected to rise to about $1.4 billion in the third quarter from the second quarter's $302 million, the company said.

Elsewhere, total trading revenues fell to $900,000 for the first two months of the quarter, compared with trading revenues of $1.1 billion in the second quarter. Investment securities gains of $300 million partly offset the decline.

In warning, J.P. Morgan became the latest Dow Jones industrial average component to pre-announce shortfalls for the September quarter. Both McDonald's (MCD: Research, Estimates) and Honeywell (HON: Research, Estimates) have already disappointed investors this month.

After the warning, credit rating agencies Standard & Poor's and Fitch Ratings downgraded Morgan's $42.4 billion in debt, a move that could raise borrowing costs for the New York firm

Like other Wall Street firms, J.P. Morgan has suffered because of its associations with Enron. Several Morgan officers were called before Congress last month because of their alleged role in helping Enron hide debt.

Morgan, in the same press release used to lower its profit forecasts, declared a quarterly dividend of 34 cents per share payable on Oct. 31 to shareholders of record as of Oct. 5. But analysts have worried that the company will have to cut the dividend if conditions worsen.

Morgan did not say with certainty when the loan picture would improve. Nor did it rule out job cuts to save money during the downturn. But the company, at least, suggested that the outlook is not getting any worse.

"I think it's fair to say that this quarter is not representative of the next 12 months," Harrison said.

Still, analysts peppering management with questions about specific guidance may have gone away frustrated.

"We have given you information sufficient enough to make your own estimate," Dina Dublon, Morgan's CFO, said on the call.

A late 2000 merger between J.P. Morgan and Chase created the New York-based financial services giant, which took in $50.4 billion in revenue last year. But a consolidating industry has not yet paid off for investors.

Shares of Morgan rival Citigroup (C: Research, Estimates), which bought Salomon Smith Barney and Travelers Insurance Group, are down 41 percent this year.