UPDATE 3-Analysts project Q3 loss for JPMorgan

viernes 26 de septiembre de 2008 16:24 CEST

(Adds Fox-Pitt analyst comments; updates share price)

By Tenzin Pema

BANGALORE, Sept 26 (Reuters) - At least two analysts forecast a third-quarter loss for JPMorgan Chase & Co (JPM.N: Cotización), citing costs related to its acquisition of Washington Mutual Inc's (WM.N: Cotización) banking operations amid challenging credit and capital markets environment.

Credit Suisse analyst Susan Katzke forecast a third-quarter loss of 25 cents a share for JPMorgan, while Goldman Sachs' William Tanona now sees a quarterly loss of 10 cents a share, compared with his prior estimate of a profit of 40 cents a share.

On Thursday, JPMorgan said it bought the banking assets of Washington Mutual for $1.9 billion, after U.S. authorities closed the top U.S. savings and loan bank, whose market value has been virtually wiped out because of soaring mortgage losses.

JPMorgan said it expects to incur $1.5 billion of pre-tax costs, but will realize an equal amount of annual savings, mostly by the end of 2010. It expects the transaction to add to earnings immediately and increase earnings 70 cents per share by 2011.

It also plans to sell $8 billion of stock and take a $31 billion write-down for the loans it bought, representing estimated future credit losses.

"We believe management's assumptions around merger costs, cost saves and future losses on the mortgage portfolio appear to be realistic and/or achievable," Goldman's Tanona said.

Credit Suisse's Katzke also expressed confidence in the achievability of the acquisition-related cost savings that JPMorgan had forecast, but said she was "less confident in the cost of the current credit and capital markets cycle to the bank's existing operations."   Continuación...