Northern Trust Earnings Cheat Sheet: Streak of Four Straight Profit Declines Snapped

S&P 500 (NYSE:SPY) component Northern Trust Corporation (NASDAQ:NTRS) reported its results for the third 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 Third Quarter

Results: Net income for the Midwest regional bank rose to $170.4 million (70 cents per share) vs. $155.6 million (64 cents per share) in the same quarter a year earlier. This marks a rise of 9.5% from the year earlier quarter.

Revenue: Revenue rose 9% to $971.5 million from the year earlier.

Actual vs. Wall St. Expectations: NTRS fell in line with the mean analyst estimate of 70 cents per share. Analysts were expecting revenue of $961.8 million.

Quoting Management: Frederick H. Waddell, Chairman and Chief Executive Officer, commented, “Our third quarter results reflect strong earnings growth despite the persistent challenges of a difficult global economic environment. New business, across the Company, was excellent as was our continued focus on the balance between revenue and expense growth. Our balance sheet strength continued to position Northern Trust distinctively with our clients amidst a challenging environment.”

Key Stats:

Last quarter’s profit increase breaks a streak of four consecutive quarters of year-over-year profit drops. In the second quarter, net income fell 23.8% from the year earlier, while the figure fell 3.9% in the first quarter, 21.6% in the fourth quarter of the last fiscal year and 17.2% in the third quarter of the last fiscal year.

The company fell in line with estimates last quarter after beating forecasts in the previous quarter with net income of 70 cents versus a mean estimate of net income of 69 cents per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 72 cents a share to 68 cents over the last sixty days. For the fiscal year, the average estimate has moved down from $2.71 a share to $2.65 over the last ninety 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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(Source: Xignite Financials)