JP Morgan Earnings Slump

JP Morgan Earnings Slump

J.P. Morgan Chase & Co. on Wednesday posted a 50% drop in first-quarter net income as it marked down $2.6 billion in leveraged lending and mortgages and quadrupled its credit-loss provision.

Chairman and Chief Executive Jamie Dimon issued a weak outlook for the remainder of the year, "or longer," saying that the massive bank expects the "economic environment to continue to be weak and for the capital markets to remain under stress."

While CEO's of Goldman and Lehman are calling an end to the credit crises, Dimon is saying this can go on longer than one year.

The results, while weak, were better than many on Wall Street had feared. The mean estimates of analysts polled by Thomson Financial were for earnings of 64 cents a share on $16.97 billion in revenue. That helped push the company's shares higher in premarket trading and push stock-index futures upward.

Of course, this is the new game on wall st. Lower the expectations so much that even a bad result seems decent.

Mr. Dimon said the weak economic environment and strained capital markets "have affected, and are likely to continue to negatively impact, our firm's credit losses, overall business volumes and earnings -- possibly through the remainder of the year, or longer." But he added "we are prepared to manage through this down part of the economic cycle, given the strength of our liquidity, credit reserves, capital and operating margins, and to successfully position our company well for the future."

Once again, through the end of the year or longer.

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