JPMorgan Chase & Co., the nation’s second largest bank, on Wednesday reported first-quarter earnings of $2.3 billion, below analysts’ estimates as the bank took a charge for its settlement of WorldCom Inc. litigation.
The results for the January-March period amounted to 63 cents a share and compared with net income of $1.9 billion, or 92 cents per share, a year earlier. The year-earlier figure does not include Bank One, which JPMorgan Chase acquired last year; the deal was completed on July 1.
Analysts surveyed by Thomson Financial had projected earnings of 69 cents for the quarter.
JPMorgan Chase said that its first-quarter results include an after-tax charge of $558 million, or 15 cents a share, for the settlement involving WorldCom, the telecommunications company that collapsed in 2002 amid massive accounting irregularities. It also includes $90 million, or 3 cents a share, for merger costs.
In March, JPMorgan Chase agreed to pay $2 billion to settle claims from investors who lost money in the collapse of WorldCom.
Excluding the charges, earnings would have been $2.9 billion, or 81 cents a share, the bank said. Revenues in the first quarter were $13.65 billion, down slightly from $13.81 billion registered a year earlier.
On a pro forma basis, the merged bank’s $2.3 billion in net income for the first quarter compared with profits of $3.03 billion a year earlier, or 84 cents a share.