The Bank of New York Mellon Corp Earnings: Streak of Four Straight Profit Rises Snapped

S&P 500 (NYSE:SPY) component The Bank of New York Mellon Corporation (NYSE:BK) reported its results for the fourth quarter. The Bank of New York Mellon is a global financial services company offering various products and services for individuals and institutions. The main activities of the company and its subsidiaries include asset management, wealth management, and broker-dealer and advisory services.

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The Bank of New York Mellon Earnings Cheat Sheet for the Fourth Quarter.

Results: Net income for the financial services company fell to $505 million (42 cents per share) vs. $679 million (55 cents per share) a year earlier. This is a decline of 25.6% from the year earlier quarter.

Revenue: Revenue was $3.54 billion last quarter.

Actual vs. Wall St. Expectations: BK fell short of the mean analyst estimate of 53 cents per share. It fell short of the average revenue estimate of $3.75 billion.

Quoting Management: “I am pleased with the meaningful progress we made in improving our capital position and reducing operating expenses. Our Basel III Tier one common equity ratio was 7.1% at the end of the quarter, and we continued to generate strong returns on tangible common equity. It was a challenging revenue quarter, as general uncertainty in the financial markets resulted in lower-than-normal levels of client activity. Our results were also impacted by seasonality in our Depositary Receipts business. We remained focused on driving our operational excellence initiatives and managing our expense base lower to offset weak market conditions,” said Gerald L. Hassell, chairman, president and chief executive officer of BNY Mellon.

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the third quarter, net income rose 4.7% from the year earlier, while the figure increased 11.7% in the second quarter, 11.8% in the first quarter and 14.5% in the fourth quarter of the last fiscal year.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of 53 cents.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the first quarter of the next fiscal year is 54 cents per share, down from 56 cents ninety days ago. For the fiscal year, the average estimate has moved down from $2.20 a share to $2.18 over the last ninety days.

Competitors to Watch: State Street Corporation (NYSE:STT), Northern Trust Corporation (NASDAQ:NTRS), SEI Investments Company (NASDAQ:SEIC), Morgan Stanley (NYSE:MS), Goldman Sachs Group, Inc. (NYSE:GS), Bank of America Corp. (NYSE:BAC), Wells Fargo & Company (NYSE:WFC), Citigroup Inc. (NYSE:C), United Western Bancorp, Inc. (NASDAQ:UWBK), and JPMorgan Chase & Co. (NYSE:JPM).

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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