By The Canadian Press and The Associated Press on January 17, 2025
Estimated reading time: 9 minutes

JPMorgan, Lululemon and more: The week in earnings

By The Canadian Press and The Associated Press on January 17, 2025
Estimated reading time: 9 minutes

JPMorgan posts record profits, Lululemon raises guidance, Cogeco kickstarts three-year plan, and UnitedHealth beats expectations.

Photo by The Associated Press / Peter Morgan

Company earnings for the week of Jan 14, 2025

JPMorgan
Lululemon
Cogeco
UnitedHealth

JPMorgan posts record annual profits as major U.S. banks thrive in the final quarter of 2024

JPMorgan’s net income soared 50% to more than $14 billion in the fourth quarter as the bank’s profit and revenue easily beat Wall Street forecasts, and other major banks reported banner earnings for the year as businesses and consumers continued to spend despite elevated interest rates.

JPMorgan’s earnings per share rose to $4.81 from $3.04 a year ago. The result beat Wall Street profit projections of $4.09 a share, according to the data firm FactSet. Total managed revenue hit $43.7 billion, up 10%, from $39.9 billion a year ago. Wall Street was expecting revenue of $41.9 billion.

JPMorgan posted a record $54 billion profit for the year, or $18.22 per share, adjusted for one-time expenses.

JPMorgan shares rose just less than 1% in morning trading.

Citigroup, Wells Fargo and Goldman Sachs also issued strong results on Wednesday.

The country’s biggest banks have benefitted from higher interest rates for the last two years, when the Federal Reserve jacked up rates to combat the inflation that took root in the wake of the COVID-19 pandemic.

The government’s latest consumer prices report, also issued Wednesday, showed that prices for many essentials rose, pushing the consumer price index to 2.9% in December, the highest it has been since July. But underlying inflation trends—watched closely by the Fed—slowed to 3.2% in December, better than analysts expected and a good sign for consumers and the broader economy.

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That, combined with the strong bank earnings, boosted markets, with the S&P 500 and Dow Jones Industrials each climbing 1.7% and the technology-heavy Nasdaq gaining 2.2%.

As great as 2024 was for markets, bank stocks did even better, despite the Federal Reserve trimming its benchmark interest rate three times between September and December.

When it issued its last cut in December, the Fed also trimmed its forecast for 2025 rate cuts to two from four as inflation remained stubbornly above the Fed’s 2% target. That sent markets into a mini-slump, but not enough to dampen what was a spectacular 2024 run. The S&P gained 23% last year, the Nasdaq climbed more than 28% and the Dow finished up nearly 13%.

As for the banks, Goldman Sachs shares finished 2024 48% higher, while JPMorgan enjoyed a 41% gain and Wells Fargo shares climbed 43%.

JPMorgan reported Wednesday that its interest income fell 3% to $23.5 billion, thanks to a downtick in interest rates.

CEO Jamie Dimon said the bank got a boost from investment banking business, where fees rose 49% and markets revenue jumped 21%. The bank’s consumer banking business also thrived, with clients opening nearly 2 million checking accounts.

The New York bank set aside $2.6 billion to cover bad loans, down slightly from the same period a year ago.

Dimon said the U.S. economy remains strong, noting the nation’s low unemployment and strong consumer spending.

“Businesses are more optimistic about the economy, and they are encouraged by expectations for a more pro-growth agenda and improved collaboration between government and business,” said, alluding to the incoming Trump administration which has promised to cut regulations across industries.

Dimon said that any regulation should balance promoting growth and keeping the banking system safe.

“This is not about weakening regulation … but rather about setting rules that are transparent, fair and holistic in their approach and based on rigorous data analysis, so that banks can play their critical role in the economy and markets.”

Dimon, however, said that the state of the geopolitics “remains the most dangerous and complicated since World War II” and that JPMorgan is preparing for a wide range of outcomes.

JPMorgan announced this week that Dimon’s top deputy, Daniel Pinto, would step away from his position as president and chief operating officer at the end of June and retire at the end of 2026. Jennifer Piepszak, co-CEO of the bank’s commercial and investment bank division, will take over the COO role with Pinto’s guidance.

After Dimon said last spring that he expected to retire within five years, it was presumed that Pinto, who has worked for the bank for more than 40 years, would take over as the bank’s top executive.

A spokesman for the bank said Tuesday that Piepszak was not currently interested in the CEO role when Dimon exits, potentially opening the door for another of the bank’s executive leadership to fill the role when it eventually opens.

Wells Fargo also topped profit expectations Wednesday with a nearly 50% jump in net income, to $5.1 billion in the fourth quarter, or $1.43 per share. Revenue came in at $20.4 billion, a touch lower than expectations. In the same quarter a year ago, Wells earned $3.4 billion, or 86 cents per share, on $20.5 billion in revenue.

In September, Wells Fargo agreed to work with U.S. bank regulators to shore up its financial crimes risk management, including internal controls related to suspicious activity and money laundering. The agreement came just seven months after the Biden Administration lifted a consent order on the bank that had been in place since 2016 following a series of scandals, including the opening of fake customer accounts.

Wells rose 5.3% in early trading.

Citigroup climbed 5.7% and Goldman Sachs gained 5.4% after both banks beat Wall Street profit forecasts. Goldman said its global banking and markets business generated nearly $35 billion in revenue, driven by strong performances from equities and investment banking.

Goldman claimed to lead all global firms in mergers and acquisitions in 2024.

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Lululemon raises fourth-quarter revenue and earnings per share forecast

*Photo by The Canadian Press / Darryl Dyck*

Lululemon Athletica Inc. has raised its forecast for revenue and earnings per share for its fourth quarter following a strong holiday season.

Lululemon chief financial officer Meghan Frank says shoppers during the holiday season responded well to the company’s offerings, enabling it to increase its fourth-quarter guidance.

The athletic clothing retailer, which keeps its books in U.S. dollars, says it now expects net revenue in the range of US$3.56 billion to US$3.58 billion for its fourth quarter.

The company’s previous guidance range was US$3.48 billion to US$3.51 billion.

The new guidance represents growth of 11% to 12% compared with the fourth quarter of its 2023 financial year, or growth of 6% to 7% excluding the 53rd week of 2024.

Lululemon also says it now expects diluted earnings per share in a range of US$5.81 to US$5.85 for its fourth quarter compared with previous guidance for US$5.56 to US$5.64.

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Cogeco earns $29.8 million in first quarter as it begins three-year transformation

*Photo by The Canadian Press / Paul Chiasson*

Cogeco Inc. reported a profit attributable to shareholders of $29.8 million, down 13.7% from $34.5 million a year earlier, as it begins a three-year transformation program in its 2025 fiscal year.

Revenues were $765 million, down from $776.2 million during the same quarter last year.

Cogeco’s cable and internet subsidiary, Cogeco Communications Inc., says profit attributable to shareholders was $100.6 million, up 12.4% from $89.5 million during the same quarter last year.

Revenues for Cogeco Communications were $738.7 million, down from $747.7 million a year earlier.

President and CEO Frederic Perron says high-speed Internet subscriber growth remained strong in the first quarter, while U.S. subscriber metrics are improving and the company prepares for an upcoming Canadian wireless launch.

Cogeco declared a dividend of $0.922 per share for shareholders of both the parent company and subsidiary, unchanged from its previous quarter but up 8% compared with a year ago.

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UnitedHealth tops profit forecasts but medical costs linger for health care giant

*Photo by The Associated Press / Peter Morgan*

UnitedHealth posted a better-than-expected profit in the final quarter of 2024, but a nagging rise in medical costs and care utilization surprised Wall Street.

Shares of the health care giant slid Thursday after it released its first financial report since the brazen shooting of one of its executives outside a New York City hotel touched a national nerve and brought to the surface American frustration over health care access.

UnitedHealth leaders opened a call with analysts Thursday by offering thanks for condolences the company has received since the Dec. 4 death of Brian Thompson, CEO of the company’s UnitedHealthcare business.

“Brian helped build this company and forged deep, trusted relationships for over 20 years, and the positive impact he had on people will be felt for years to come,” Chief Financial Officer John Rex said.

In the recently concluded fourth quarter, more than 87% of the premiums UnitedHealth collected went back out the door to cover medical costs. That was “well above” what analysts expected, TD Cowen analyst Ryan Langston said in a research note.

UnitedHealth said it was still dealing with an increase in prescriptions for expensive specialty drugs, rate cuts to its federally funded Medicare business and other cost pressures it detailed in previous quarters.

The company’s enrollment in the state and federally funded Medicaid programs dropped by about 400,000 people. UnitedHealth leaders said rate updates from states to cover costs from those remaining have lagged.

UnitedHealth’s adjusted results, which exclude one-time items, totaled $6.81 per share in the quarter. The company’s revenue climbed about 7% to $100.8 billion, which missed expectations.

Analysts expected earnings of $6.73 per share on $101.6 billion in revenue, according to the data firm FactSet.

UnitedHealth Group Inc. operates the nation’s largest health insurer, UnitedHealthcare, which covers more than 49 million people in the United States. It also operates a large pharmacy benefit manager that runs prescription drug coverage and a growing business that delivers care and provides technical support.

The company’s full-year profit sank 36% to $14.4 billion in 2024 after climbing every year for nearly a decade. The bottom line was hurt partly by costs tied to a massive cyberattack that hit its Change Healthcare business early in the year

UnitedHealth, based in Minnetonka, Minnesota, surprised Wall Street early last year by reporting soaring medical costs in the final quarter of 2023. Weeks later, the company discovered the cyberattack, which disrupted business and added more than $2 billion in direct response costs.

Then in early December, Thompson was fatally shot as he walked to the company’s annual investor meeting in mid-town Manhattan. A 26-year-old suspect, Luigi Mangione, faces federal and state charges in connection with Thompson’s death.

The shooting gave rise to an outpouring of grievances about insurance companies. A survey conducted a few weeks after the shooting found that most Americans believe health insurance profits or coverage denials bear some responsibility for Thompson’s death.

Shares of UnitedHealth, a component of the Dow Jones Industrial Average, sank after Thompson’s shooting and fell about 4% on the year.

The stock had rallied so far in 2025 before falling nearly 5% to $517.76 Thursday morning. Shares of other other health care conglomerates like CVS Health and Cigna also were down.

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