JPMorgan Chase, PNC Financial Beat; Wells Fargo Mixed

JPMorgan Chase ( JPM ) and PNC Financial Services ( PNC ) reported better-than-expected fourth-quarter results early Friday, while Wells Fargo ( WFC ) was mixed.

JPMorgan Chase

[ibd-display-video id=3079086 width=50 float=left autostart=true] Estimates: Earnings per share of $1.69, down 1%, on revenue of $24.99 billion, up 7%.

Results : JPMorgan earned $1.76 a share adjusted on revenue of $25.45 billion. That earnings figure excludes a $2.4 billion negative impact from the Trump tax cuts. JPMorgan sees a 19% effective tax rate in 2018.

Fixed income, credit and currency trading revenue tumbled 34% to $2.22 billion. Consumer and business banking revenue rose 16% to $5.6 billion. Commercial banking revenue grew 20% to $2.4 billion. Asset and wealth management revenue increased 9% to $3.4 billion.

Stock : Shares of the Dow component climbed 1.65% to 112.67 on the stock market today . Shares were within range of a 108.50 buy point of a 3-weeks trading pattern . Breakouts from a 3-weeks-tight pattern are opportunities for existing investors to add a few more shares to their holdings.

Bank of America ( BAC ) and Citigroup ( C ) added 1.7%. Both report next week.

Wells Fargo

Estimates: EPS of $1.04, up 1%. Revenue is seen rising 4% to $22.427 billion.

Results : EPS of $1.16 on revenue of $22.05 billion. Wells Fargo booked a $3.35 billion after-tax benefit on the tax plan and a $3.25 billion pretax charge for litigation expenses. The total loan balance edged up 0.5% from the prior quarter to $956.8 billion, after three straight sequential declines. Community banking revenue rose 3% to $12 billion. Wholesale banking revenue dipped 0.8% to $7.09 billion. Wealth and investment management revenue rose 5.7% to $4.3 billion.

Stock : Shares slid 0.7% to 62.55.

PNC Financial Services

Estimates: A 12% jump in EPS to $2.20 on an 8% revenue increase to $4.168 billion.

Results : EPS of $2.29, excluding the impact of tax legislation and other items, on revenue of $4.26 billion.

Stock : Shares edged up 0.2% to 151.84.

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Analysts hadn't exactly been expecting blowout earnings from the banks this month, as many financial institutions absorb short-term, but heavy, hits to their profits due to the tax reform.

Goldman Sachs (GS), has forecast a $5 billion dent to earnings, much of it due to the repatriation tax. Morgan Stanley (MS), Bank of America and Citigroup have said they would take big charges from writing down so-called deferred tax assets, which companies can use to ease their tax burden in the event of a loss.

Still, tax reform is largely expected to benefit the banks longer term. Analysts have said the legislation would likely be a bigger theme this earnings season than the results themselves, as Wall Street tries to assess the full benefits of the bill.

Financials also have been rallying in 2018 on higher bond yields, with the 10-year Treasury rate moving past 2.5% this week. Higher yields, including a wider spread between short- and long-term maturities, should bolster banks' profitability in traditional lending.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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