Analysts Cautiously Optimistic about JPMorgan’s (NYSE: JPM) Earnings Results

The market opened strong today as JPMorgan Chase’s earnings wildly beat the street’s expectations. JP Morgan earned $3.6 billion in net-profit, or about $0.82 per share, beating the $0.52 per-share earnings that analysts had expected.

How are analysts viewing the results? Overall, the tone has been cautiously optimistic among analyst. UBS probably summed it up best, saying “while we are seeing some initial signs of consumer credit stability, we are not yet certain that this trend will continue.”

Here’s what a few firms had to say:

Bank of America / Merrill: “Investors are looking for signs of Consumer credit stabilization, but in the press release the company noted that while it sees some signs of this (clearly referring to the mortgage book), it’s too early to be sure of a lasting trend; and in Cards, as expected, losses continue to rise because unemployment has not yet shown signs of peaking. Last quarter the Conference call commentary was more encouraging than the press release, so there may be more color later.”

Deutsche Bank: “JPM reported 3Q EPS of $0.82 vs. consensus of $0.52. The biggest driver of the beat was robust trading revenues–both within the investment bank and in the corporate/unallocated segment (which included $900m of after tax trading income or $0.23 per share). Credit was mostly in line with expectations. Mgmt’s outlook on credit included no change in the outlook for mortgage losses vs. previous expectations, while the outlook for credit card is slightly worse.”

UBS: “Credit mostly worse: managed net charge offs 4.30% vs. 4.0% in 2Q, commercial banking net charge offs ratio +44bps to 1.11%; cards net charge offs 10.3% (21.94% WAMU, 9.41% Chase), & in retail financial services, home equity lines of credit improved, but prime/subprime worse. 2. Mgmt commented “while we are seeing some initial signs of consumer credit stability, we are not yet certain that this trend will continue.” 3. Treasury & Securities services, net income -20%. 4. Cards lost $700mm. 4. Not much deposit growth.”

Morgan Stanley: “Revenues were driven by better than expected trading and underwriting results, offset by higher than expected debt-valuation adjustments and lower mark-to-market gains. Card Services was better than expected on better top line and higher spending as well as significantly better than expected credit performance.”