JPMorgan Chase kicked off the third-quarter bank earnings season on October 13 with a rare stumble. The largest U.S. bank by assets reported earnings per share of $5.57, short of the $5.90 that analysts surveyed by LSEG had forecast, and the stock fell about 3% in premarket trading.
Net income came in at $15.31 billion, or $5.57 per share, up 6% from $14.39 billion, or $5.07 a share, a year earlier. Excluding $658 million in net securities losses, adjusted EPS was $5.75 — still below the consensus mark.
The shortfall stands out against the backdrop of the prior quarter, when JPMorgan posted its best quarter ever with $21.2 billion in net income and a headline $7.70 per share that cleared estimates by nearly 40%.
The core lending engine kept running. Net interest income rose 13% year over year to $27.04 billion, driven by higher deposit balances, higher Card Services balances and larger wholesale loan balances, partly offset by the impact of lower rates. Excluding Markets, NII was $24.7 billion, up 6%.
Total reported net revenue reached $50.17 billion, up 8% from $46.4 billion a year earlier. On the managed basis cited by CNBC, revenue of $50.91 billion came in below the $51.22 billion expected. Zacks pegged the revenue miss at 3.9% versus its consensus, the first revenue miss in four quarters.
The weakness sat in the Wall Street divisions. Total trading revenue was $10.3 billion, up 15% from a year earlier but below the $10.5 billion analysts expected. Bloomberg reported that fixed-income trading revenue fell 4% year over year, the first such decline in more than two years. Investment banking fees rose 14%.
The numbers fell short of what co-president Doug Petno had signaled just weeks earlier, when he told analysts that both investment banking and trading revenue were headed for a percentage jump in the mid- to high-teens. Both divisions also retreated sequentially from the standout second quarter.
CEO Jamie Dimon framed the results against a deceptively calm economy. "Large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions continue to shift under the surface," he said, even as business investment and consumer spending keep the U.S. economy strong. "These forces may be manageable, but we remain prepared for a wide range of outcomes."
Dimon has spent years warning that rates could climb higher than investors expect, fueled by persistent inflation and geopolitical conflict.
Provisions for credit losses totaled $2.74 billion, reflecting a net reserve build of $539 million — concentrated in wholesale banking — and net charge-offs of $2.2 billion, down $389 million. The reserve build itself signals the bank is setting aside more against potential trouble, but the charge-off decline suggests losses are not yet accelerating.
JPMorgan set the tone for a delicate week. Wells Fargo, reporting the same day, posted net interest income of $12.52 billion against the $12.66 billion analysts expected, and a $1.03 billion credit-loss provision. Bank of America warned back in September that third-quarter investment banking fees would decline by more than 10% while trading revenue would be roughly flat. Goldman Sachs already reported a beat earlier Tuesday with its stock surging, Citigroup reports before the open, and Bank of America and Morgan Stanley follow on Wednesday — offering a fuller read on whether the record second-quarter boom is holding.
Three questions matter from here. First, whether JPMorgan maintains its full-year NII guidance of roughly $105.5 billion, or about $96.5 billion excluding Markets. Second, whether adjusted expenses climb further above the $107.5 billion outlook — revenue growth that fails to outrun costs is the quiet reason this quarter fell short. Third, what management says about the consumer with the 10-year Treasury yield holding above 5%.
For investors, the message is simple: when the market prices in perpetual beats, a single miss is enough to draw blood. Bank earnings season has only just begun.