How did JPM's Q4 earnings surprise investors?

JPMorgan Chase & Co. (JPM) delivered a notable earnings surprise in its fourth quarter (Q4) of 2024, exceeding market expectations with a robust financial performance despite facing regulatory challenges and a decline in net interest income (NII). 1. **Earnings Per Share (EPS) Surprise**: JPM reported an EPS of $4.81 for Q4 2024, which was a pleasant surprise given the market's expectations. This indicates that the bank's profitability exceeded analysts' estimates. 2. **Revenue Growth**: The bank's revenue for the quarter was $43.7 billion, marking a 10% year-on-year increase. This strong revenue growth reflects JPM's successful business segments, including investment banking and trading activities. 3. **Net Interest Income (NII) Performance**: Despite a 2% decline in NII, which was attributed to lower rates, the bank's NII stood at $24.05 billion, a 19.1% increase over the prior-year quarter. This demonstrates the bank's resilience in maintaining its core income stream. 4. **Return on Tangible Common Equity (ROTCE)**: JPM's ROTCE for the quarter was reported at 21%, indicating efficient capital deployment and strong profitability relative to shareholders' equity. 5. **Investment Banking and Trading Strength**: The investment banking segment performed well, driving JPM's earnings higher. The bank's trading performance also contributed to the robust earnings outcome. In summary, JPM's Q4 earnings exceeded investor expectations due to strong revenue growth, particularly in investment banking and trading, and effective capital management despite challenges in NII and lower rates.