JPMorgan Chase reports $524 million hit 🙈

Wednesday, 13th April 2022 by Gotrade

Apr 13, 2022

Hey Gotraders,

JPMorgan (JPM) just reported earnings. Let’s take a look at what they reported:

They reported earnings of $2.63 per share vs analysts’ expectations of $2.69 per share (this is unconfirmed)
They reported revenue of $31.59 billion vs analysts’ expectations of $30.86 billion
Revenue was down 5% compared to last year
Profit amounted to $8.28 billion, down 42% from last year
JPM recorded a $902 million charge for building credit reserves for anticipated loan losses
JPM’s provision for credit losses, which includes the $902 million reserve build, was $1.46 billion, more than 2x the $617.5 million expected by analysts
JPM booked $524 million in losses driven by markdowns and widening spreads after Russian’s invasion of Ukraine

“We remain optimistic on the economy, at least for the short term – consumer and business balance sheets as well as consumer spending remain at healthy levels – but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine” - CEO Jamie Dimon.

Why is this important? Other companies are also affected by the macro environment and by the Russian war.
“The markets are extremely treacherous at the moment; there’s a lot of uncertainty… The full ramifications of the current conditions are still uncertain” - Troy Rohrbaugh, JPMorgan’s Global Markets Chief.
In the last couple of days itself, these are a few of the companies that made headline news in relation to the Russian war:
Netflix (NFLX) - Analysts warn that subscriber numbers will take a hit from removal of Russian customers.
Boeing (BA) - Boeing loses more than 90 jet orders due to war in Ukraine.
Nokia (NOK) and Ericsson (ERIC) halt new business in Russia. Is Huawei next?
The list goes on….

📉 Meta plans to take a cut of nearly 50% on NFT sales 💰

Meta, Meta, Metaverse… Meta-Facebook (FB) announced just recently that it plans to sell merch in the Metaverse. They are currently testing out in-app purchases on Horizons World, its social virtual reality app. This includes allowing creators to sell NFTs in the Metaverse. What they didn’t mention was their plan to take a huge cut for themselves.

Meta said that they would charge a 30% “hardware platform fee” for sales made through the Meta Quest Store (where it sells apps and games for its virtual reality headsets), plus a 17.5% fee for using Horizon Worlds. Thats a total of 47.5%! *Mind-blown!*

That’s even more than the commissions that Apple (AAPL) and Google (GOOG) charge for their app stores!

People were obviously unhappy with this.

One Twitter user wrote: “I hate you Facebook.”

Another said: “If Meta wants 47.5% of NFT sales they gotta talk to the IRS because I don’t even have that after taxes.”

Shares of Meta closed at $214.14, down 1.07% for the day.

📈 Lucid launches a new & pricier version of its EV 🚗

EV maker Lucid (LCID) has announced that it will be launching an updated version of its flagship EV. This EV is known as the Lucid Air Grand Touring Performance Model, and it will arrive in June. It is a luxury sedan with a 446-mile range and 1050 horsepower, and it is priced at a whopping $179,000!

This is the longest-range and fastest-charging EV on the market currently. Impressive!

“The remarkable speed with which we are able to conceive and bring this model to market is possible only because of Lucid’s high degree of vertical integration and in-house production of our proprietary EV powertrain and battery pack technology” - Peter Rawlinson, CEO and CTO of Lucid Group.

Shares of Lucid closed at $21.29, down 1.89% for the day. Shares are up 1.17% in extended trading at the time of writing.

Top movers & shakers 🎢

What else is making headline news 📰

Popular companies releasing earnings this week 💰

Wednesday: JPMorgan Chase (JPM), BlackRock (BLK), Fastenal (FAST), First Republic Bank (FRC), Delta Airlines (DAL), Rent the Runway (RENT)

Thursday: Taiwan Semiconductor (TSM), United Health (UNH), Wells Fargo (WFC), Morgan Stanley (MS), Goldman Sachs (GS), Citibank (C), U.S. Bancorp (USB), PNC Financial (PNC), Ericsson (ERIC), State Street (STT), Ally Financial (ALLY)

A company’s market value may fluctuate considerably around the time that the earnings report is expected to be published. Stock prices may rise or fall according to analysts' speculative estimates, released prior to the actual earnings announcement.

The earnings season can be a time of great opportunity since better-than-expected figures could cause a company’s stock to greatly increase in value. Worse-than-expected results could have the opposite effect.

That’s all from us for now.

Signing out,

Gotrade Team

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