JPMorgan’s profit sinks 42% YoY in fiscal Q1

Shares of JPMorgan Chase & Co (NYSE: JPM) opened nearly 4.0% down on Wednesday after the Wall Street bank reported lower-than-expected net income for its fiscal first quarter.

Notable figures in JPMorgan’s Q1 earnings report

Net income came in at $8.28 billion in fiscal Q1 or $2.63 per share.
In the same quarter last year, net income stood at $14.3 billion or $4.50 a share.
At $30.7 billion, revenue was down about 5.0% on a year-over-year basis.
FactSet consensus was for $2.72 of EPS on $30.59 billion in revenue.
Investment banking fees tanked 31% while markets revenue was down 3.0%.
JPMorgan sees rising demand for commercial banking loans that jumped 2.0% in Q1.

CEO Jamie Dimon blamed inflation and the Ukraine war for the hit to net income. The bank built $902 million of net credit reserve due to a higher probability of downside risk. It benefitted from $5.2 billion of net credit reserve releases. In the earnings press release, CEO Dimon said:

According to JPMorgan, its board authorised $30 billion in share repurchase. The bank forecasts a $1.0 billion hit from the Ukraine war over time. Extreme volatility in commodity prices due to the conflict pose another challenge for the big banks.

Despite a 42% hit to profit, Hightower’s Stephanie Link still sees the stock as attractive. On CNBC’s “Squawk Box”, she said: