Coffee With Greta: Bank Earnings Beat
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Good morning friends!
Futures are higher as the second-quarter earnings season officially kicks off with big banks.
Let’s get right to it!
JPMorgan Tops Q2 Expectations
JPMorgan Chase (JPM) shares are up 2.9% ahead of the open after beating Q2 expectations on the top and bottom line.
Here’s how the largest bank in the U.S. did compared to analysts’ estimates:
- Adjusted EPS: $4.37 vs $4 expected
- Revenue: $42.4 billion vs $38.96 billion expected
Net income surged 67% year over year while revenue jumped 34%.
That growth was driven by higher rates with net interest income rising 44%.
CEO Jamie Dimon said, “The U.S. economy continues to be resilient. Consumer balance sheets remain healthy, and consumers are spending, albeit a little more slowly. Labor markets have softened somewhat, but job growth remains strong.”
Chase also reported better-than-expected trading and investment banking results.
Fixed income trading revenue dipped 3% to $4.6 billion vs $4.1 billion expected.
Equity trading revenue came in at $2.5 billion vs $2.41 billion expected.
And investment banking revenue of $1.5 billion topped the $1.42 billion estimate.
Citigroup Rises On Earnings Beat
Citigroup (C) shares are rising 1.5% in premarket trade after reporting better-than-expected second-quarter results.
Here’s how the investment bank’s performance compared to analysts’ estimates:
- EPS: $1.33 vs $1.30 expected
- Revenue: $19.44 billion vs $19.29 billion expected
The CEO said, “Amid a challenging macroeconomic backdrop, we continued to see the benefits of our diversified business model and strong balance sheet.”
Total revenue dipped 1% year over year as the markets and investment banking business weighed on results.
But personal banking and wealth management revenue rose 6% from a year ago.
Wells Fargo Jumps After Earnings
Wells Fargo (WFC) shares are up 3.0% ahead of the open after beating Q2 expectations on the top and bottom line.
Here’s how the consumer bank’s results compared to analysts’ estimates:
- EPS: $1.25 vs $1.16 expected
- Revenue: $20.53 billion vs $20.12 billion expected
Higher interest rates fueled that beat as net interest income jumped 29% from a year ago.
Consumer and small business banking earnings rose 19% year over year.
Wells Fargo’s CEO said, “Our company remains strong and we have significant opportunities to continue to improve how we serve our customers. The U.S. economy continues to perform better than many had expected, and although there will likely be continued economic slowing and uncertainty remains, it is quite possible the range of scenarios will narrow over the next few quarters.”
The bank set aside $1.7 billion in credit loss reserves, up from $1.2 billion in the first quarter.
UnitedHealth Beats Earnings Estimates, Hikes Outlook
UnitedHealth Group (UNH) shares are rising 2.9% in premarket trade after beating Q2 expectations and raising its outlook.
Here’s how the health insurance giant’s results compared to analysts’ estimates:
- EPS: $6.14 vs $6.02 expected
- Revenue: $92.9 billion vs $90.6 billion expected
UnitedHealth’s medical loss ratio rose to 83.2% from 81.5% a year ago, in-line with expectations.
That number reflects the proportion of premiums paid out to cover medical expenses and a higher number means more spending on medical costs.
The company now expects full-year EPS of $24.70 to $25.00 vs $24.50 to $25.00 previously.
In Case You Missed It
- The federal budget deficit widened more than expected in June. That gap jumped to $227.76 billion last month compared to $88.8 billion in June 2022. Government receipts fell $42 billion to $418 billion while spending rose $96 billion to $646 billion. Through the first nine months of the fiscal year, the deficit was $1.39 trillion, up $515.1 billion compared to the same period last year.