Even JPMorgan Chase (JPM) is disappointing investors this earnings season. The big bank said fourth-quarter profits fell to $2.97 billion, or 86 cents a share, from the year-ago $4.53 billion, or $1.26 a share. The 34 percent drop in net income left the bank shy of the 93-cent Wall Street analyst consensus estimate. Like Citi (C) before it, JPMorgan was hit by a sharp rise in money set aside to cover loan losses, particularly in its card business, where the provision for credit losses rose 40 percent from a year ago, and in its retail financial services unit, where the provision quadrupled. JPMorgan was also hit by a 35 percent drop in revenue at its investment banking unit, which was socked by a big writedown of subprime-related holdings and a sharp slowdown in the debt markets. Surprisingly, one area of strength was the company’s mortgage business, where revenue rose nearly tenfold from a year ago to $332 million.

But CEO Jamie Dimon, who has been widely lauded in recent months for steering clear of the collateralized debt obligation mess that has hobbled Citi and Merrill Lynch (MER), among others, spoke in Wednesday’s press release of the need to buckle down with the economy slowing. “We remain extremely cautious as we enter 2008,” he said. “If the economy weakens substantially from here – for which, as a company, we need to be prepared – it will negatively affect business volumes and drive credit costs higher. However, we feel well-positioned given the investments and actions we have taken over the past few years to improve our businesses’ operating margins, create a stronger systems infrastructure and build a fortress balance sheet.” With all the tumult in the banking sector, that fortress is likely to remain attractive to investors regardless of Wednesday’s earnings shortfall.

Research in Motion (RIMM) continued its daylong rally in after-hours trading Thursday after the maker of the Blackberry wireless e-mail device beat fiscal third-quarter earnings estimates and guided higher for the fourth quarter.

RIM made $371 million, or 65 cents a share, for the quarter ended Dec. 1, up from the year-ago $175 million, or 31 cents a share. Revenue rose 22 percent sequentially and doubled from year-ago levels to $1.67 billion. Wall Street analysts were looking for a 62-cent profit on sales of $1.65 billion.

“RIM’s performance in the third quarter was solid with strong adoption of BlackBerry products and services continuing across multiple market sectors, including enterprise, small and medium business, and consumer market segments,” said co-chief exec Jim Balsillie. “We are also pleased with the excellent consumer sales results achieved so far in the holiday buying season.”

Accordingly, RIM guided higher for the fourth quarter, calling for a profit of around 68 cents a share on sales of $1.84 billion, with net subscriber additions of 1.82 million. Analysts were looking for a 65-cent profit on sales of $1.75 billion.

Shares of RIM have dropped 22 percent from their high last month but remain sharply up for the year, having more than doubled off their 2006 closing price. Some sober-minded observers have ventured a solid number out of RIM could set off a fierce rally in the stock, given hard-hit money managers’ need to stuff their portfolios with winners for year-end.

The stock rose 5 percent in heavy trading Thursday, prompting Barron’s Eric Savitz to wonder - referring to the selloff in Oracle (ORCL) shares ahead of stronger-than-expected earnings out Wednesday - whether the market would get it right this time. With shares up 9 percent in early postclose trading, the answer seems to be yes.

The mortgage mess keeps wreaking havoc on Wall Street. Fixed-income bonuses at Merrill Lynch (MER) will drop 40 percent from a year ago on average, Bloomberg reported Monday, as new CEO John Thain seeks to steer the firm past this fall’s bond market meltdown. The bonus cuts will be steepest for traders in mortgage bonds and collateralized debt obligations, the risky debt whose collapse led to an $8 billion writedown at Merrill last quarter and cost former chief Stan O’Neal his job. Corporate bond and interest rate traders will see their bonuses cut as well, the report indicates.

The move comes as Goldman Sachs (GS), which has been the one firm on Wall Street to clean up on the mortgage mess, prepares to report fourth-quarter numbers Tuesday. It’s widely expected that the firm will report another slate of eye-popping profits, even as rivals such as Morgan Stanley (MS) and Bear Stearns (BSC) — whose fourth-quarter numbers are due out Wednesday and Thursday — struggle to contain the damage. It’s a good bet that Merrill’s bad news on the bonus front won’t be the last for the once-highflying CDO crowd.