State Street Earnings Keep Profitability STREAK Alive

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

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State Street Corporation Earnings Cheat Sheet

Results: Net income for the banks-major regional fell to $490 million (98 cents per share) vs. $513 million ($1 per share) a year earlier. This is a decline of 4.5% from the year-earlier quarter.

Revenue: Fell 9.5% to $2.43 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: State Street Corporation fell short of the mean analyst estimate of 99 cents per share. Analysts were expecting revenue of $2.42 billion.

Quoting Management: Joseph L. Hooley, State Street’s chairman, president and chief executive officer, said, “During the second quarter our business performed well in a challenging economic environment which included increasing weakness in international markets. Compared to the first quarter of 2012, we achieved positive operating leverage due primarily to the reduction in compensation expenses, solid overall expense management and continued business momentum fueled by the impact of new business installations in our core asset servicing and asset management businesses.”

Key Stats:

The company has now seen net income fall in each of the last two quarters. In the first quarter, net income fell 9.3% from the year-earlier quarter.

The company has now fallen short of analyst estimates for the last three quarters. It missed the mark by 2 cents in the first quarter and by one cent in the fourth quarter of the last fiscal year.

Revenue fell last quarter after seeing a rise the quarter before. Revenue rose 0.3% to $2.56 billion in the first quarter from the year earlier.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from $1.02 a share to $1 over the last sixty days. The average estimate for the fiscal year is $3.88 per share, down from $3.93 ninety days ago.

Competitors to Watch: The Bank of New York Mellon Corp., Northern Trust Corporation, Citigroup Inc., SEI Investments Company, JPMorgan Chase & Co., Bank of America Corp., Goldman Sachs Group, Inc., Barclays PLC, FXCM Inc, and Morgan Stanley.

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

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