Northern Trust Earnings: Profitable Quarter Accelerates Growth

Falling revenue did not prevent S&P 500 (NYSE:SPY) component Northern Trust Corporation (NASDAQ:NTRS) from reporting a profit boost in 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 Trust Corporation Earnings Cheat Sheet

Results: Net income for the banks-midwest rose to $178.8 million (73 cents per share) vs. $170.4 million (70 cents per share) in the same quarter a year earlier. This marks a rise of 4.9% from the year-earlier quarter.

Revenue: Fell 8.4% to $972.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Northern Trust Corporation fell short of the mean analyst estimate of 75 cents per share. It fell short of the average revenue estimate of $1 billion.

Quoting Management: Frederick H. Waddell, Chairman and Chief Executive Officer, commented, “Third quarter performance featured growth in client assets under custody and management of 14% and 16%, respectively, versus last year. Trust, investment and other servicing fees, the largest component of our revenues, grew 8%. The continued headwinds posed by lower interest rates, market activity and volatility moderated these achievements. However, we continued to adapt to these macroeconomic challenges with effective expense management as exemplified by the decline in expenses both year-over-year and sequentially.”

Key Stats:

The company has now seen its net income rise for three quarters in a row. In the second quarter, net income rose 18.2% and in the first quarter, the figure rose 6.8%.

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

Revenue has fallen in the past two quarters. In the second quarter, revenue declined 0.2% to $1.06 billion from the year-earlier quarter.

Looking Forward: Expectations for the company’s next-quarter results are lower than they have been. Over the past sixty days, the average estimate for fourth quarter has fallen from 77 cents per share to 75 cents. For the fiscal year, the average estimate has moved down from $2.99 a share to $2.95 over the last sixty days.

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

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