J.P. Morgan Earnings Beat Estimates

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J.P. Morgan is still the bank to work for, even though salaries per employee are down 3 percent this year. The bank released its third quarter earnings today of $1.02 per share, beating analysts' estimates by 11 cents.

In its announcement, JPMorgan Chase & Co. said its third-quarter profit fell 4 percent to $4.26 billion, or $1.02 a share, from $4.42 billion, or $1.01 a share, in the year-ago period.

Compensation per employee in J.P. Morgan's investment bank fell 3 percent so far this year despite a year-to-date increase in revenues. According to The Wall Street Journal, J.P. Morgan has allocated $289,611 in compensation for each of its 26,615 investment bank employees, including bankers and traders, down from $298,866 a year ago.

The total has declined to $7.7 billion from $7.9 billion, meaning compensation as a percentage of net revenue has fallen to 35 percent from 37 percent, excluding the impact of the UK's bonus tax.

While headcount is about flat for the year, J.P. Morgan has revealed plans to reduce its investment banking staff by around 1,000.

According to MarketWatch, revenue remained about flat at $23.8 billion, while revenue on a managed basis totaled $24.4 billion in the latest quarter, up from $24.3 billion.

On the other hand, the bank's fees from investment banking fell 31 percent to $1 billion while fees from debt underwriting fees fell 37 percent to $496 million and stock underwriting fees declined 47 percent. Its private equity business actually lost $347 million. And when you strip away a $1.9 billion accounting benefit, J.P. Morgan's profit decline slides to around 33 percent, according to Bloomberg.

J.P. Morgan Chairman and CEO Jamie Dimon issued a statement saying, "All things considered, we believe the firm's returns were reasonable given the current environment."

Wall Street analysts had expected J.P. Morgan to earn 91 cents a share on revenue of $23.3 billion, according to a survey by FactSet Research.

During the quarter, J.P. Morgan says it booked a one-time gain of 29 cents a share from a debit valuation adjustment in its investment bank unit that resulted from widening of the firm's credit spreads. Its private equity unit reported a loss of 9 cents a share.

The bank took 15 cents a share in litigation expenses related to mortgage matters.

The bank says it continues to face a challenging banking and capital markets program, but held on to its number one ranking in global investment banking fees so far in 2011, said MarketWatch.

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