State Street 3rd-qtr profit rises, revenue slips
BOSTON -- State Street Corp., one of the largest custody banks in the U.S., reported higher net income but a slight revenue decline on Tuesday, saying that while equity markets have improved, its clients are still conservative in their investments.
The bank, which provides money-handling services to pension funds and other big investors, earned $654 million, or $1.36 per share, up 20 percent from $543 million, or $1.10 per share in the July-September period a year earlier.
Revenue fell 3 percent to $2.36 billion from $2.43 billion last year.
On an adjusted basis, State Street earned $473 million, or 99 cents per share, down less than 1 percent from $476 million, or 96 cents per share, a year earlier. Adjusted revenue slid 3 percent to $2.35 billion from $2.41 billion.
The adjusted figures for the latest quarter exclude a benefit of $166 million related to the company's claims from the 2008 bankruptcy of Lehman Brothers, and other items.
Analysts, on average, were expecting adjusted earnings of 96 cents per share on revenue of $2.38 billion, according to FactSet.
"Our third-quarter results reflect continued resilience across both asset servicing and asset management, partially offset by weakness in trading services," said Joseph L. Hooley, chairman, president and CEO, in a statement.
Servicing fees edged down a half percent to $1.1 billion and investment management fees grew nearly 10 percent to $251 million. But the company said its trading services revenue of $232 million plunged nearly 31 percent year-over-year, due mainly to a sharp drop in foreign-exchange trading.
State Street also said it closed its acquisition of Goldman Sachs's administration services business on Monday.
In morning trading, State Street shares were unchanged at $41.58, up about 3 percent since the start of the year.