Northern Trust Earnings: Consecutive Profit Quarter Streak Stays Intact

S&P 500 (NYSE:SPY) component Northern Trust Corporation (NASDAQ:NTRS) reported its results for the second 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 Northern Trust Corporation rose to $1.8 billion (73 cents per share) vs. $152 million (62 cents per share) in the same quarter a year earlier. This marks a substantial increase from the year-earlier quarter.

Revenue: Rose 4.6% to $988.5 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. Analysts were expecting revenue of $1 billion.

Quoting Management: “Northern Trust performed well in the second quarter, with net income and earnings per share improving both year over year and sequentially. Trust, investment and other servicing fees, the largest component of our revenues, exhibited attractive growth and achieved the highest level since the second quarter of 2008. New business from both personal and institutional clients was, yet again, a significant contributor to fee growth. Expense management was solid in the quarter and our return on equity trended higher despite low interest rates and ongoing global economic challenges.”

Key Stats:

After beating analyst estimates for the two previous quarters, the company fell short of forecasts. In the first quarter, it topped the mark by one cent, and in the fourth quarter of the last fiscal year, it was ahead by 2 cents.

Net income has increased more than threefold year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 1081.6% 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 third 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.

Competitors to Watch: State Street Corporation, The Bank of New York Mellon Corp., SEI Investments Company, Washington Federal Inc., Capital One Financial Corp., Marshall & Ilsley Corp., Bank Mutual Corporation, New York Community Bancorp, Inc., Flagstar Bancorp, Inc., and People’s United Financial, Inc.

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

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