In an effort to provide solutions to organizations for rationalizing corporate travel expenses, JPMorgan Chase & Co. (JPM) said on Tuesday that it has entered into a partnership with IBM (IBM) by integrating its expense management tools and services with its Corporate Card solution.

This alliance will enable companies improve visibility into business travel costs, better leverage supplier relationships, reduce costs and time associated with expense report processing and audit expense reports.

With this alliance, JPMorgan’s PaymentNet online visibility and reporting tool, coupled with IBM’s auditing capabilities, are expected to result in greater overall program consistency.

Estimate Revision Trend

Over the last 30 days, 6 of the 21 analysts covering JPMorgan have lowered their estimates for the first quarter of 2010, while only one upward revision was witnessed. For 2010, 7 of the 24 analysts covering the stock have lowered their estimates, while no upward revision was observed.

Currently, the Zacks Consensus Estimate for the first quarter is earnings of 63 cents per share, which would be up by 57.9% from the year-ago quarter. Also, the full year estimate of $3.03 would be up by about 35.1% from 2009.

However, the higher number of downward estimate revisions for the first quarter and absence of upward estimate revisions for 2010 indicate a likelihood of downward pressure on the performance of the stock in the near term.

With respect to earnings surprises, the stock has been steady over the last four quarters, with positive surprises. The average remained positive at 120.6%. This implies that JPMorgan has surpassed the Zacks Consensus Estimate by 120.6% over that period.

Earnings Recap

JPMorgan’s fourth quarter earnings came in at 74 cents per share, substantially ahead of the Zacks Consensus Estimate of 61 cents. This also compares favorably with earnings of 6 cents in the prior-year quarter.

Better-than-expected results of JPMorgan were primarily aided by continued strong performance of the Investment Bank. All the other segments except Consumer Lending and Card Services also delivered solid results during the quarter. However, high levels of consumer credit costs and increased provision for credit losses were the primary factors, which negatively impacted the results.

We anticipate continued synergies from JPMorgan’s diversification and strong capital position, but increasing provisions and rising consumer credit costs will drag upcoming results. However, we are impressed by some improvement in credit quality during the reported quarter.
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