The culprits: write-downs linked to failed home-equity loans, subprime mortgages and leveraged buyouts that cost the bank upwards of $5 billion.

Net revenue fell 52%, while investment-banking fees fell 30% and debt-underwriting fees declined 58%.

Its investment-banking division posted a net loss of $87 million in the first quarter, down from its record $1.5 billion net income a year earlier. Retail finance services posted a net loss of $227 million, down from an $859 million gain in 2007.

In other words, it wasn’t a good quarter.

“Our earnings this quarter were down significantly as market conditions and the credit environment remained challenging. The Investment Bank had markdowns related to leveraged lending and mortgages and increased loan loss reserves. Retail Financial Services again increased loan loss reserves related to home equity and subprime mortgages, as performance in these portfolios continued to deteriorate,” Jamie Dimon, Chairman and Chief Executive Officer, said in a statement.

Somehow, one stockholder sees that as good news.

“In this environment, being able to post earnings as they did is I think all-in good news,” Charles Bobrinskoy, vice chairman of Ariel Capital Management LLC in Chicago, which owned more than 611,000 JPMorgan shares as of Dec. 31, told Bloomberg.

If that wasn’t bad news to him, Dimon was clear about the near term outlook.

“Our expectation is for the economic environment to continue to be weak and for the capital markets to remain under stress,” he said. “These factors have affected, and are likely to continue to negatively impact, our firm’s credit losses, overall business volumes and earnings – possibly through the remainder of the year, or longer.”

To prepare for it, JPMorgan added $2.5 billion to credit reserves, including $1.1 billion related to home equity loans.

It also has its merger with The Bear Stears Cos., Inc. (BSC), a deal Dimon said “provides a unique opportunity to enhance our ability to serve clients by adding new capabilities in prime brokerage and clearing and by improving strength in equities, mortgage trading, commodities and asset management.”

Trouble for the Titans

On Tuesday, Washington Mutual Inc. (WM) reported a $1.14 billion loss due to a growing number of customers that have fallen behind in their mortgage payments. A week earlier, the Seattle-based lender announced it raised $7 billion in capital, while slashing its dividend and cutting 3,000 jobs. Ironically, the capital raise was a last-ditch effort to stave off a takeover bid from JPMorgan.

U.S. Bancorp (USB) announced Tuesday that first-quarter earnings fell 4% as a result of losses connected to the mortgage market.

Bear Stearns said Monday that profit fell 79% in its fiscal first quarter, Reuters reported.

Also on Monday, General Electric Co. (GE) shocked the market when it announced a 6% drop in net income for the first quarter of 2008.

“Our primary shortfall was a decline in financial services earnings,” GE Chairman and CEO Jeff Immelt said.

And though Wells Fargo & Co. (WFC) beat analysts’ estimates in its first-quarter earnings release today (Wednesday), net income dropped 11% to $2 billion, the company said in a statement.

National City Corp. (NCC) will report its earnings tomorrow (Thursday).