JPMorgan (JPM), Wells Fargo (WFC) Beat Earnings

Big banks started earnings season with a big bang this morning. JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) both beat Wall Street’s estimates, getting financials off to the running start most investors were hoping for.

JPMorgan’s earnings fell 3.1% year over year, from $5.56 billion to $5.38 billion. However, the $1.31 in per-share profit was better than the $1.18 most analysts had expected. Revenue also outpaced forecasts, and was 6.3% higher than a year ago.

Despite the earnings beat, shares of JPMorgan are down 1.8% in early trading. But there was some good news for income investors coming out of this morning’s earnings announcement: the company will increase its quarterly dividend from 25 cents to 30 cents a share, upping its yield to 2.7%. The yield was less than 1% as recently as last June.

Meanwhile, Wells Fargo’s first-quarter profits rose 13% year over year. The bank’s per-share earnings 75 cents edged out the 73 cents a share analysts were expecting. Revenue increased 6.4% from a year ago.

Wells’ mortgage-lending unit made promising strides. The $129 billion in mortgages originated exceeded the $120 billion it originated in the fourth quarter and the $84 billion it produced during the first quarter of 2011. Wells Fargo is already the largest mortgage lender in the U.S.

Like JPMorgan, however, Wells shares have fallen in early trading. WFC was down 1.5% as of 10:45 a.m. Still, the stock is up 21% in 2012. JPMorgan shares are up more than 32% for the year despite today’s slight drop-off.

Bank earnings continue next week. Citigroup (NYSE: C) reports on Monday, Goldman Sachs (NYSE: GS) reports on Tuesday, and Morgan Stanley (NYSE: MS) and Bank of America (NYSE: BAC) each report Thursday.

If those bank earnings match today’s, it could be a good sign for the U.S. markets – and the economy as a whole. 

Published by Wyatt Investment Research at