Boston, MA 07/15/2014 (wallstreetpr) – JPMorgan Chase & Co. (NYSE:JPM) reports its 2Q2014 today. It is worth taking a preview of what the company is likely to say about its second earnings results in the year.
Wells Fargo & Co (NYSE:WFC) kicked off the big banks earnings report last week. The bank’s report turned out to be a scare in that it reported a decline in per share earnings and even failed to extend its own record of 17 consecutive quarters of rising earnings.
Citigroup Inc (NYSE:C) has also released its 2Q earnings and although it managed to beat expectation on both earnings and revenue front in the results issued Monday, the two big banks – Citigroup and Wells Fargo – succeeded in confirming the challenge in the industry as mortgage deals dwindle amid high-interest rates.
What to expect in JPM’s 2Q
According to Wall Street, investors should expect JPMorgan Chase & Co. (NYSE:JPM) to report 2Q revenue of $24 billion and earnings of $1.306 per share.
What not to expect
Although shrinking mortgage deals is a widespread problem for the big lenders, analysts think that JPMorgan Chase & Co. (NYSE:JPM) is not likely to be hurt by poor mortgage banking, especially if the prior quarter’s results are anything to consider. The bank generated 50 percent of its revenue from corporate and investment banking in 1Q while consumer and community banking contributed 28 percent of the revenue in the quarter. Given that mortgage banking comprises just about 15 percent of the consumer and community banking division, analysts think that a decline in mortgage deals may not have significant damage on 2Q revenue.
Impact of mortgage settlement
However, the JPMorgan Chase & Co. (NYSE:JPM)’s $13 billion settlement with the U.S. Justice Department is expected to weigh heavily on 2Q earnings. On the other hand, the settlement will help the company get over its legal problems related to the controversial mortgage-backed securities sold to investors before the housing downturn about six years ago.
