U.S. stock earnings season "first shot": JPMorgan Chase's annual net profit hits a record high, Goldman Sachs' Q4 net profit doubles, BlackRock's annual client funds reach a record

Wall Street fires the "first shot" of the Q4 earnings season for U.S. stocks, with JPMorgan Chase, Goldman Sachs, Wells Fargo, Citigroup, and BlackRock all announcing their latest financial results.

Benefiting from the Federal Reserve's interest rate cut cycle and the U.S. elections, the earnings reports of the five major investment banks exceeded expectations, with many highlights:

JPMorgan Chase Q4 revenue and profit both exceeded expectations, with strong performance in trading and investment banking; annual net profit reached a record high.

Goldman Sachs Q4 net profit doubled, with record revenue from stock trading, and significant growth in investment banking and asset management.

Wells Fargo is gradually emerging from the mire, with Q4 net interest income exceeding expectations, and the guidance for net interest income in 2025 is better than expected.

BlackRock Q4 revenue and profit both exceeded expectations, with the company attracting the highest amount of client funds in its history for the year.

Citigroup's revenue guidance for 2025 is better than expected, while also announcing a $20 billion stock buyback.

JPMorgan Chase: Q4 revenue and profit both exceed expectations, trading income hits historical high for the same period

On January 15th, before the U.S. stock market opened, JPMorgan Chase released its latest financial report showing:

Q4 revenue increased by 22.2% year-on-year to $42.8 billion, exceeding analysts' expectations of $41.73 billion;

Earnings per share were $4.81, up 58.2% year-on-year, far exceeding Wall Street's expectation of $4.11 per share.

As the largest bank in the U.S. by asset size, JPMorgan Chase's performance is closely watched. After the earnings report was released, JPMorgan Chase's stock initially rose 3.8% in pre-market trading but quickly erased all gains. Over the past 12 months, JPMorgan Chase's stock price has increased by 46%.

By business segment, the better-than-expected performance was mainly supported by investment banking.

Q4 net interest income was $23.5 billion, down 2.9% year-on-year, but still exceeded expectations. JPMorgan Chase also established a reserve of $2.63 billion to cover bad loans and credit losses.

Trading income surged 21% year-on-year to $7.05 billion, hitting a historical high for the same period. Fixed income performed well, with revenue exceeding analysts' expectations, while stock trading income fell short of expectations.

Investment banking revenue grew 46% year-on-year to $2.6 billion, partly due to strong global trading activity in Q4, marking an end to the sluggish M&A activity this year.

For the full year, JPMorgan Chase's net profit for 2024 was $58.5 billion, an 18% increase from $49.6 billion in 2023, and doubled from $29.25 billion in 2020, setting a new historical high.

The company expects that this year's net interest income could reach approximately $94 billion, higher than analysts' expectations of $89.8 billion.

JPMorgan Chase CEO Jamie Dimon stated in the earnings report:

The U.S. economy has remained resilient. Businesses are more optimistic about the economic situation, encouraged by a more growth-friendly agenda and expectations of improved cooperation between the government and businesses.

Two significant risks remain: current and future spending demands could trigger inflation, which may persist for some time. Additionally, the geopolitical situation remains the most dangerous and complex since World War II JPMorgan Chase's balance sheet remains rock solid:

Total deposits amount to $2.41 trillion, below the expected $2.44 trillion; loans are $1.35 trillion, in line with expectations;

Return on equity is 17%, higher than the expected 14.1%; standardized CET1 ratio is 15.7%, above the expected 15.2%

Cash and bank deposits are $23.37 billion, exceeding the expected $22.86 billion.

It is worth noting that JPMorgan Chase's total assets recently shrank for the first time, decreasing from $4.2 trillion in the previous quarter to $4.0 trillion, despite deposits rising again from $2.383 trillion to $2.417 trillion.

Wells Fargo: Net interest income exceeds expectations, 2025 guidance better than expected

The next to announce earnings is Wells Fargo, the fourth largest bank in the U.S.:

Fourth-quarter revenue is $20.38 billion, slightly down from $20.48 billion in the same period last year, with expectations at $20.59 billion;

Earnings per share are $1.43, a year-on-year increase of 66.2%; non-interest expenses decreased by 12% year-on-year to $13.9 billion.

Wells Fargo's net interest income for the fourth quarter is $11.84 billion, down about 7% year-on-year, but exceeding the estimated $11.7 billion.

The bank expects net interest income in 2025 to be about 1% to 3% higher than in 2024 ($47.68 billion). In contrast, analysts' expectations are $47.13 billion.

Wells Fargo's stock rose over 2% in pre-market trading. In the past year of 2024, Wells Fargo's stock price has increased by 42.7%, outperforming competitors JPMorgan Chase, Bank of America, Citigroup, and the broader KBW Bank Index.

Additionally, under the leadership of current CEO Charlie Scharf, Wells Fargo has worked for years to resolve compliance issues stemming from the fake accounts scandal that erupted in 2016. Scharf stated in the earnings report:

I believe we will successfully complete the work required by the consent order and integrate operational risk and compliance thinking into our culture.

BlackRock: Record client funds for the year

BlackRock also announced its latest earnings report:

Fourth-quarter revenue is $5.68 billion, exceeding the estimate of $5.59 billion

Adjusted earnings per share are $11.93, higher than the estimated $11.46.

It is noteworthy that in 2024, BlackRock attracted client funds totaling $641 billion, setting a record high. This total exceeds the entire assets accumulated by some smaller asset management companies over decades, showcasing BlackRock's extensive influence and appeal in the global market.

Company CEO Larry Fink stated in the earnings report:

This is just the beginning. As BlackRock enters 2025, it will have greater growth and upside potential than ever before BlackRock's U.S. stock rose nearly 5% in pre-market trading. As of the end of the fourth quarter, BlackRock's assets under management totaled $11.55 trillion, slightly below the estimated $11.66 trillion.

Goldman Sachs: Q4 net profit doubled, record revenue from stock trading business

Goldman Sachs reported its best profit report since Q3 2021:

Fourth-quarter net revenue increased by 23% year-on-year to $13.87 billion, far exceeding the estimated $12.37 billion;

Net profit rose to $4.11 billion, or diluted earnings per share of $11.95, compared to a net profit of $2.01 billion, or diluted earnings per share of $5.48 in the same period last year.

The profit growth of over 100% was mainly due to strong performance in the stock trading department, robust growth in investment banking, and expansion in asset management:

Fourth-quarter FICC sales and trading revenue was $2.74 billion, estimated at $2.44 billion, mainly driven by gains in foreign exchange, mortgage, and credit products;

The stock trading department achieved revenue of $3.45 billion, setting a historical record, exceeding market expectations by $450 million;

Net interest income was $2.35 billion, estimated at $2.11 billion;

Investment banking revenue was $2.06 billion, a year-on-year increase of 24%, higher than the estimated $2 billion;

Asset and wealth management business generated revenue of $4.72 billion, an 8% year-on-year increase, exceeding expectations by $560 million.

After the earnings report was released, Goldman Sachs' stock price rose by 2.2%, making it the best-performing stock among major U.S. banks with a 48% increase in 2024.

Goldman Sachs CEO David Solomon stated in the earnings report:

We are very pleased with our strong performance this quarter and this year. I am glad that we have achieved or exceeded almost all the goals set in our corporate development strategy five years ago.

Citigroup: $20 billion stock buyback, full-year guidance better than expected

Citigroup's latest earnings report shows that the group's fourth-quarter revenue was $19.58 billion, with earnings per share of $1.34. Among them, FICC sales and trading achieved revenue of $3.48 billion in the fourth quarter, estimated at $2.94 billion.

At the same time, Citigroup announced a $20 billion stock buyback.

After the earnings report was released, Citigroup's stock price rose by more than 3% in pre-market trading.

Citigroup expects a tangible common equity return on equity of 10%-11% by 2026, down from the previous estimate of 11%-12%.

Additionally, Citigroup expects revenue for 2025 to be between $83.5 billion and $84.5 billion, with market expectations at $83.2 billion