JPMorgan’s profit misses; posts unexpected $1 billion legal expense
JPMorgan Chase & Co (JPM.N) reported lower-than-estimated third-quarter profit on Tuesday as unexpected legal expenses of $1 billion caught analysts off guard and offset strength in its capital markets and lending businesses.
The bulk of the costs came from setting aside money to resolve government probes into alleged rigging of foreign-exchange rates, Chief Financial Officer Marianne Lake said.
JPMorgan, the biggest U.S. bank, also reported higher-than-expected operating costs, with compensation, technology and marketing all up.
“We continue to be focused and diligent on managing expenses,” she said on a conference call with analysts.
A year ago, JPMorgan reported its first loss since 2004 due to $7.2 billion in litigation expenses. Overall, the bank agreed to pay nearly $20 billion in 2013 to settle various legal issues.
“The ongoing high level of litigation expense after last year’s … mega settlement is a bit disturbing,” said Chris Kotowski, an analyst with Oppenheimer & Co. “At some point, it ceases to become a ‘special’ item.”
Overall, JPMorgan reported earnings of $5.6 billion, or $1.36 per share, compared with a loss of $380 million a year earlier. Analysts expected earnings of $1.38 per share, on average, according to Thomson Reuters I/B/E/S.
Revenue rose 5 percent to $24.2 billion from $23.1 billion in the third quarter of 2013.
Source: Reuters- JPMorgan’s profit misses; posts unexpected $1 billion legal expense
