Northern Trust Corp Earnings: Profit Dips and Misses Estimates

S&P 500 (NYSE:SPY) component Northern Trust Corporation (NASDAQ:NTRS) reported its results for the fourth quarter. Northern Trust is a financial holding company that provides investment management, asset and fund administration, and banking solutions for corporations, institutions, and affluent individuals.

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Northern Earnings Cheat Sheet for the Fourth Quarter.

Results: Net income for the Midwest regional bank fell to $130.2 million (53 cents per share) vs. $157.1 million (64 cents per share) a year earlier. This is a decline of 17.1% from the year earlier quarter.

Revenue: Revenue was $955.6 million last quarter.

Actual vs. Wall St. Expectations: NTRS reported adjusted net income of 50 cents per share. By that measure, the company fell short of mean estimate of 68 cents per share. Analysts were expecting revenue of $972.4 million.

Quoting Management: Frederick H. Waddell, Chairman and Chief Executive Officer, commented, “Our results for the fourth quarter and the full year reflect strong new business but were impacted by the difficult conditions in which we currently operate. We have been actively analyzing various aspects of our businesses and technology to identify opportunities to deliver more value to our clients and shareholders. Through these efforts we have developed and begun to implement initiatives that we expect will sustainably improve productivity and profitability. These profit improvement initiatives are expected to benefit annual pre-tax income by approximately $250 million by the end of 2013. ”

Key Stats:

The company fell short of forecasts after beating estimates in the previous two quarters. In the third quarter, it topped the mark by 2 cents, and in the second quarter, it was ahead by one cent.

Net income has dropped 11.4% year over year on average across the last five quarters. Performance was hurt by a 23.8% decline in the second quarter from the year earlier quarter.

Looking Forward: Next quarter’s results are expected to be more favorable for the company. Over the past sixty days, the average estimate for the first quarter of the next fiscal year has reached 68 cents per share, up from 67 cents. For the fiscal year, the average estimate has moved up from $2.63 a share to $2.64 over the last seven days.

Competitors to Watch: State Street Corporation (NYSE:STT), The Bank of New York Mellon Corp. (NYSE:BK), SEI Investments Company (NASDAQ:SEIC), Washington Federal Inc. (NASDAQ:WFSL), Capital One Financial Corp. (NYSE:COF), Marshall & Ilsley Corp. (NYSE:MI), Bank Mutual Corporation (NASDAQ:BKMU), New York Community Bancorp, Inc. (NYSE:NYB), Flagstar Bancorp, Inc. (NYSE:FBC), and People’s United Financial, Inc. (NASDAQ:PBCT).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

 

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com