Wall Street Horizon Blog

J.P. Morgan Maintains Leadership Position; Sets Earnings Date a Record 136 Days Out

Posted by Eric Soderberg on Jan 8, 2016 8:46:40 AM

One week from today (Thursday, January 14) and before the markets open, J.P. Morgan will 'unofficially' kick-off the earnings season when it announces its earnings and hosts its conference call.  If you recall from last quarter, much ado was made out of the fact that J.P. Morgan scheduled its Q3 earnings announcement for after market hours, instead of before the market opened, as it had done every quarter since at least 2Q 2005.

Why the change in timing?  Well, Bank of America had beaten J.P. Morgan to the punch.  On August 14, 2015, Bank of America announced that it would be releasing its Q3 earnings and hosting its conference call before the markets opened on October 14, 2015.  This put J.P. Morgan in a pinch for three reasons: 1) J.P Morgan had not yet announced when they would be releasing their Q3 earnings, 2) for every quarter since 3Q 2008 (with the exception of two (2), J.P. Morgan has been the first major financial institution to announce its earnings (see chart here) and 3) it was not practical for J.P. Morgan to release their earnings before the market opened on October 13, as that was the day many people would be returning from the three-day Columbus Day weekend. 

So for J.P. Morgan to remain in its 'leadership' position, it chose to announce earnings after the markets closed on Tuesday, October 13.  This shift to an afternoon announcement gained the attention of investors who trade on changes to earnings dates/times and a few reporters from the Wall Street Journal and American Banker who took the opportunity to expose the competition that occurs among the big banks each quarter with respect to when each will announce its earnings.

What's behind the competition?  Well, to be the first in the industry to announce will certainly attract more media attention and may further the distinction, or impression, of being the industry leader.  When the American Banker asked Joe Evangelisti, a spokesperson for J.P. Morgan, about this earnings brinkmanship he said "There's no race to be first" and "We put out the earnings as soon as they are ready".  It's the later statement that inspired this blog post, and here's why. 

Over the previous five (5) quarters J.P. Morgan has announced the date/time of their upcoming earnings, on average, 56 days ahead of time.  And during this time the furthest ahead they have pre-announced has been sixty (60) days and the least amount of time has been fifty three (53).  This quarter's earnings date/time was pre-announced a record 136 days ahead of time.  In fact, it was August 31, 2015, that J.P. Morgan put their stake in the ground for when they would announce their Q4 results.

There is no doubt in my mind that J.P. Morgan pre-announced this early to avoid any potential timing conflicts for this quarter's (Q4 2015) earnings.  Pre-announcing this early however did open the door for Bank of America or Wells Fargo to step into the leadership position and pick an earlier date/time for their Q4 2015 earnings releases and conference calls.  And while Bank of America and Wells Fargo also pre-announced earlier than they ever had before, neither took the bait, and both will again be announcing their Q4 earnings after our undisputed leader, J.P. Morgan.

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