JPMorgan Chase & Co. (JPM) will host a conference call to review fourth quarter 2013 financial results on Tuesday, January 14, 2014 at 8:30a.m. (Eastern). The results are scheduled to be released at 7:00a.m. (Eastern).
Wall Street anticipates that the bank will earn $1.32 per share for the quarter, which is $0.07 lower than last year's $1.39 per share. iStock expects the Dow Jones member to beat Wall Street's consensus number. The iEstimate is $1.35; three pennies better than the street's outlook.
JPMorgan Chase is a financial holding company. The Company is a global financial services firm and a banking institution in the United States, with global operations. The Company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity.
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The major, money center bank has topped Wall Street's consensus estimate by an average of $0.15 for the last 16 quarters. Fifteen of the 16 quarters delivered bullish surprises ranging from $0.02 to $0.43. The lone miss fell short by -$0.02.
Needless to say, but we will anyway, it takes no courage to predict another bullish surprise for the "too big to fail" financial institution.
Despite its history of bypassing the street's outlook, shareholders have not shared the same success in the three-days surrounding the quarterly, profit checkups. Returns bottomed out at -6.10% and maxed out at 4.70% while averaging a tiny gain of 0.11%.
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Narrowing our focus to the last four January announcements, iStock finds JP Morgan exceeded the consensus EPS estimate three of the four, but the stock barely budged. Fourth quarter price changes were -0.20%, 0.30%, 0.70% and 1.40% during the three-days bookending the fourth quarter release. Trading Q4's earnings haven't paid dividends.
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According to Trefis.com, JPM will have an $850 million reduction in the fourth quarter's results. The charge is a result of legal settlements for mortgage legacy issues totaling $13 billion and $1.7 billion, non-tax deductible settlement for the Bernard Madoff Ponzi scheme. The research firm says the company will have to set another $400 million aside for Q4 reserves.
Meanwhile, the consensus estimate remained steady the last 90-day, starting out at $1.31, hitting a high of $1.33 60-days ago, and settling on $1.32 seven days ago. If JPM Pulls $400 million out, that works out to $0.11 per share, which could make for some fascinating accounting gymnastics to hit next Tuesday's earnings target.
Overall: The iEstimate and JPMorgan Chase & Co.'s (JPM) history suggest that another bullish surprise is on the way. However, there has been no January EPS-effect for JPM shares. If the Madoff settlement dings the bottom line, or reduces guidance, investors are likely to see it as a one-off event and overlook it; although, the settlement a piling up and the costs could dampen JPM's ability to hike its dividend or repurchase shares. Both of which could be viewed negatively by investors.
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