State Street Corp Earnings Cheat Sheet: Consecutive Profit Quarter Streak Stays Intact

S&P 500 (NYSE:SPY) component State Street Corporation (NYSE:STT) reported its results for the third quarter. State Street provides a range of investment management strategies, investment management advisory services and other financial services.

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State Street Earnings Cheat Sheet for the Third Quarter

Results: Net income for the financial services company fell to $543 million ($1.10 per share) vs. $546 million ($1.08 per share) a year earlier. This is a decline of 0.5% from the year earlier quarter.

Revenue: Revenue was $2.43 billion last quarter.

Actual vs. Wall St. Expectations: STT reported adjusted net income of 96 cents per share, which beat the mean analyst estimate of 88 cents per share. Analysts were expecting revenue of $2.38 billion.

Quoting Management: Joseph L. Hooley, State Street’s chairman, president and chief executive officer, said, “Our third-quarter results demonstrate the resiliency of our business model as our operating-basis revenues increased from last year’s third quarter by about 12%, supported by prior period new business wins as well as stronger foreign exchange revenue. On an operating basis, we achieved positive operating leverage compared to the second quarter, reflecting effective expense control and expense savings from the business operations and information technology transformation program we launched last November. Salaries and benefits expenses declined during the third quarter from the second quarter, as a result of reductions in incentive compensation and our success in executing this transformation program.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 5 cents in the second quarter, by 3 cents in the first quarter, and by 2 cents in the fourth quarter of the last fiscal year.

Net income has dropped 0.6% year over year on average across the last five quarters. Performance was hurt by an 83.3% decline in the fourth quarter of the last fiscal year from the year earlier quarter.

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 99 cents a share to 89 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $3.78 a share to $3.63 over the last ninety days.

Competitors to Watch: The Bank of New York Mellon Corp. (NYSE:BK), Northern Trust Corporation (NASDAQ:NTRS), Citigroup Inc. (NYSE:C), SEI Investments Company (NASDAQ:SEIC), JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corp. (NYSE:BAC), Goldman Sachs Group, Inc. (NYSE:GS), Barclays PLC (NYSE:BCS), FXCM Inc (NYSE:FXCM), and Morgan Stanley (NYSE:MS).

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(Source: Xignite Financials)