JPMorgan Profit Beats Analysts’ Estimates as Expenses Drop

JPMorgan Chase & Co. (JPM), the biggest U.S. bank by assets, said second-quarter profit climbed 5.2 percent as the firm cut costs to compensate for falling revenue in two of its largest businesses.

Net income advanced to $6.29 billion, or $1.54 a share, from $5.98 billion, or $1.46, a year earlier, according to a statement Tuesday from New York-based JPMorgan. Twenty-nine analysts surveyed by Bloomberg estimated $1.45 a share.

Wall Street has turned to cost-cutting measures after trading revenue declined in four of the past five years. JPMorgan, the first U.S. bank to report results, said in May it would eliminate thousands of jobs and send back-office workers to cheaper locations to save money.

Noninterest expenses fell 6 percent to $14.5 billion, while revenue declined 3.2 percent to $24.5 billion. JPMorgan shares rose 0.8 percent to $68.65 at 7:45 a.m. in New York.

Earnings at the corporate and investment bank, run by Daniel Pinto, climbed 9.9 percent to $2.34 billion on a 15 percent drop in expenses to $5.14 billion. Revenue slipped 5.8 percent from a year earlier to $8.72 billion amid sluggish fixed-income trading.

Fixed Income

Excluding the impact of year-ago business sales, fixed-income trading revenue fell 10 percent, which the company attributed to weakness in credit and securitized products, currencies and emerging markets, offset by strength in rates.

The firm posted $2.93 billion in fixed-income trading revenue, falling short of the $3.36 billion estimate from Wells Fargo & Co.’s Matthew Burnell and $3.45 billion from Harte.

“Trading conditions became more challenging in June,” Jason Goldberg, an analyst at Barclays Plc, said in a July 10 research note. Fixed-income trading that month was “choppy and uneven among spread-widening, increased risk aversion, and reduced activity owing to actions in Greece and China.”