New York: Shares of JPMorgan Chase bolted higher on Tuesday even as the banking giant reported lower quarterly earnings due to a drop in mortgage banking profits and trading revenues.
JPMorgan, the biggest US bank by assets, said second-quarter earnings slid 7.9 percent from the year-ago period to $5.99 billion.
Still, shares jumped 3.8 percent in afternoon trade to $58.44, making JPMorgan the biggest gainer in the Dow.
Deutsche Bank said the surprisingly solid results showed that JPMorgan offers "good upside over time."
Earnings translated into $1.46 per share, well above analyst estimates of $1.29.
Revenues dropped 2.3 percent from last year to $25.35 billion, more than the $23.76 billion forecast by analysts.
Strong areas for JPMorgan included investment banking fees, which rose three percent from a year ago, and increased credit card and auto loans.
JPMorgan chief executive Jamie Dimon said the bank saw "encouraging signs across our businesses" toward the end of the second quarter.
"While it is too early to assume that this momentum will continue, we have confidence in the long-term growth of the economy."
But the results included another weak performance in mortgage banking, where net income fell by $433 million to $709 million.
Analysts had been girding for a big drop in JPMorgan`s stock and bond trading revenues after the company in May warned of a 20 percent decline in the category.
Instead, JPMorgan reported revenues for these trading categories fell 13.6 percent to $4.6 billion.
JPMorgan officials pointed an uptick in trading in June, but said activity had dropped off again in July.
"It`s an environment of extremely low volatility across pretty much every product category, every asset class and very low levels of client activity," said chief financial officer Marianne Lake.
The bank expects trading revenue to remain lackluster in the second half unless there is a pickup in volatility, or a macroeconomic event that changes the trading environment, Lake said.
Dimon, who said July 1 that he would be treated for throat cancer, reiterated that his prognosis was good, that the cancer had not spread and that he intends to remain active in managing the giant US bank.
"I feel great," Dimon told reporters on a conference call.
Dimon said the board has been briefed on his condition and is "fully prepared" to take action if needed. The board has a list of succession candidates compiled before Dimon was diagnosed.
"My illness has nothing to do with succession planning," Dimon said. "They do it anyway."
