JPMorgan Chase beats Street

JPMorgan Chase & Co. and Wells Fargo & Co. experienced first-quarter profit declines, while BlackRock Inc. and Knight Capital Group Inc. showed increases for the quarter and Piper Jaffray Cos. swung to a loss. JPMorgan Chase & Co. recorded a 50% drop in first-quarter net income as it took $2.6 billion in write-downs and increased its credit loss provision. The New York-based financial services company posted net income of $2.37 billion, or 68 cents a share, down from $4.79 billion, or $1.34 a share, in the first quarter of 2007. Still the firm managed to trump Wall Street’s expectations. Analysts polled by Thomson Financial were expecting earnings of 64 cents a share. Meanwhile, JP Morgan’s quarterly revenue fell 52%, from a year earlier. The asset management division posted a 16% drop in net income to $356 million, while assets under management increased 13% to $1.2 trillion. The increase in assets was fueled by a 16% increase in alternative assets. Wells Fargo’s first-quarter net income fell 11% as the bank dealt with growing loan losses, but it still managed to beat Wall Street estimates. The San Francisco-based bank earned $2 billion, or 60 cents a share, down from $2.24 billion, or 66 cents a share, a year earlier. Analysts polled by Thomson Financial had estimated earnings of 57 cents a share. The bank wrote off $1.5 billion in losses stemming from loans, more than double the $715 million it wrote off a year earlier. The company also increased its credit loss provisions to $2 billion, including $500 million to cover loan losses that management expects to suffer in the future. Income in the wealth management group increased 21% from the year-earlier quarter. BlackRock posted a 24% increase in first-quarter net income as assets under management grew, though earnings fell short of analysts’ expectations. The New York-based money management company said net income for the first quarter was $242 million or $1.82 a share, up from $195.4 million, or $1.48 a share, in the year-earlier period. Excluding costs related to compensation expenses, the company earned $1.90 a share. Analysts polled by Thomson Financial had expected earnings of $2 a share. Assets under management rose to $1.36 trillion as of March 31, marking an 18% increase from a year earlier. “As the second quarter begins, markets remain highly unstable and continue to be a challenge for investors worldwide,” BlackRock’s chief executive, Laurence Fink, said in a statement. Knight Capital Group recorded a 2% increase in net income for the first quarter as a volatile market helped boost trading results, offsetting a decline in the company’s asset management business. The Jersey City, N.J.-based financial services firm posted net income of $32.5 million, or 35 cents a share, up from $31.9 million, or 31 cents a share, in the first quarter of 2007. The prior-year figure included a 1 cent loss from discontinued operations. Analysts polled by Thomson Financial had expected the company to post earnings of 30 cents a share for the latest quarter. Revenue in Knight's global markets business jumped 27% from a year earlier to $78.9 million. But fees from Knight’s Deephaven Capital Management asset management unit fell 75% to $15.2 million. Deephaven had about $3.5 billion in assets under management as of April 1, down 10% from $3.9 billion a year earlier. Piper Jaffray posted a first-quarter loss on a slowdown in its underwriting business. The Minneapolis-based firm said it lost $3.4 million, or 22 cents a share, compared with earnings of $15.1 million, or 97 cents a share, a year earlier. Analysts surveyed by Thomson Financial had expected the company to post a profit of 12 cents a share. Revenue from the firm’s equity financing business fell to $16.5 million, down 59% from a year earlier. For the recent first quarter, asset management revenue totaled $4 million, marking a 26% decline from the fourth quarter.