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Pre-Market: Wells Fargo Beats JPMorgan in 2013 Earnings; Google Snaps Up Nest Labs


Google has a much bigger toehold in the "internet of things" now.

Stocks are heading higher today, but a lackluster quarter for JPMorgan Chase & Co (NYSE:JPM) and Wells Fargo & Co (NYSE:WFC), two of the biggest US banks, could weigh on investor sentiment.

Before the opening bell, stock futures were pointing to a higher opening. Futures contracts on the Dow Jones Industrial Average (INDEXDJX:.DJI) were up 0.06% to 16,244. S&P 500 (INDEXSP:.INX) futures rose 0.20% to 1,818.80 and Nasdaq (INDEXNASDAQ:.IXIC) futures gained 0.22% to 3,517.25.

On the economic front, retail sales rose 0.2% in December, beating expectations that sales would be flat from November. Excluding autos and gas, sales were up 0.6%. December export prices rose 0.4%, but import prices were flat on a monthly basis.

JPMorgan, the largest US bank by assets, reported fourth-quarter earnings of $1.40 per share, beating estimates by a nickel. This figure does not include the $0.27 per share that the company paid out in non-recurring legal fees, including the $2.6 billion that it paid to settle allegations stemming from the Bernie Madoff Ponzi scheme. Though earnings were up, revenue fell 1.1% to $24.11 billion. The sorest part of the bank's financials in the last quarter was investment banking, where profit fell 47% to $858 million. The consumer side of the bank saw income rise 19% to $2.4 billion, though mortgage originations were down 54%.

CEO Jamie Dimon commented on the bank's regulatory and legal woes:

"We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter. We reached several important resolutions -- Global RMBS, Gibbs & Bruns, and Madoff," he said in the earnings release. "It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues, and move forward."

Dimon may elaborate more during the earnings conference call with analysts and shareholders later this morning. Shares of JPMorgan were up 0.61% in pre-market trading.

Wells Fargo & Co, the largest US mortgage lender, booked record profits last quarter. EPS came in at $1, beating estimates by $0.02. Revenue of $20.67 billion was $40 million higher than expected. For the full year, profit was up 16% to $21.9 billion, a record for the bank. For the first year ever, Wells Fargo beat JPMorgan, which ended the year with $17.69 billion in earnings. Wells Fargo benefited from higher interest rates for mortgage originations and a trend toward refinancing. But the mortgage business continues to slow due to those higher rates. Originations fell to $50 billion from $80 billion in the third quarter. Much of Wells Fargo's growth this quarter stemmed from cost cutting, mostly from job cuts made in the previous quarter.

Google (NASDAQ:GOOG) shares rose 1.25% after the company announced that it will acquire Nest Labs, a pioneer in Internet-enabled thermostats and other home appliances. Google paid $3.2 billion for the company. The start-up was founded by the former Apple (NASDAQ:AAPL) engineer credited with creating the distinctive design of the iPod.

Twitter: @vincent_trivett
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