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News > Companies
JP Morgan 2Q beats Street
July 13, 2000: 11:26 a.m. ET

Investment bank 2Q up from year ago, revenue rises; beats forecasts
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NEW YORK (CNNfn) - Investment banking firm J.P. Morgan & Co. posted Thursday an unexpected increase in fiscal second-quarter earnings, citing strength in its asset management and equities activities and a rebound from last year's weakness in its fixed-income and currency markets divisions.

Morgan, a Dow Jones industrial index component, reported net income of $542 million, or $2.90 a diluted share, up from $504 million, or $2.52 a year earlier. Analysts surveyed by First Call had forecast earnings of $2.45 a share for the quarter.

graphicBesides the strength in asset management and equities, the company gave a boost to its earnings per share by repurchasing 3.8 million shares of its stock during the quarter.

"I was a little surprised at their earnings, but there was nothing shocking," Deutsche Banc Alex. Brown Analyst Michael Mayo said. "It was a good quarter. What was important about their report was that earnings and revenue coming from credit is in a secular decline. That takes some downside volatility while being somewhat offset by proprietary trading..."

Mayo said he maintains a "buy" rating on the company.

Revenue rose 13 percent to $2.48 billion. The best gains were in equities, which saw revenue climb 31 percent to $504 million, and interest rate and currency markets, which also saw a 31 percent rise in revenue to $384 million.

Asset management operations saw revenue climb 19 percent to $409 million, and profit margins there improved as well. Investment banking revenue rose only 4 percent to $426 million, but the company said its market share in global mergers and acquisition activity rose to 20 percent, good for fifth place, up from 15 percent and a sixth-place ranking a year earlier.

"I think a lot of it had to do with fixed income, foreign exchange and derivatives," said Andrew Collins, an analyst with ING Barings. "I think there will be a rebounding in capital markets in the second quarter. I expect them to bounce back with a more healthy investment banking business."

Collins has a "hold" rating on the company.

J.P. Morgan (JPM: Research, Estimates) shares were up 1-15/16 to 124-1/2 in trading Thursday morning. Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.