Earnings Roundup: BK, BLK, USB, STT, & More...
The slumping economy negatively impacted many smaller companies that reported earnings on Tuesday. The following are some firms that reported earnings before the opening bell:
Bank of NY Mellon Cuts Dividend as Profit Falls
Bank of New York Mellon lowered its dividend 63 percent to build capital, after a decline in fees resulting from falling equity markets caused first-quarter profit to decline more than expected.
Chief Executive Robert Kelly said the decision to cut the quarterly payout to 9 cents per share from 24 cents was "not made lightly." He said the reduction will save $700 million a year and help the bank repay more quickly the $3 billion of taxpayer money received under the government's Troubled Asset Relief Program.
Net income attributable to common shareholders declined 57 percent to $322 million, or 28 cents per share, from $746 million, or 65 cents per share, a year earlier, the bank said.
Excluding writedowns for goodwill and investments as well as merger costs, profit was 53 cents per share, below the average analyst forecast of 63 cents, Reuters Estimates said.
Revenue, excluding investment writedowns, fell 14 percent to $3.28 billion, short of the average $3.67 billion forecast. Expenses fell 10 percent.
Bank of New York Mellon reduced its quarterly dividend to 9 cents per share from 24 cents.
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The company said total fee revenue fell 20 percent to $2.43 billion. This included a 20 percent decline from securities servicing to $1.23 billion, and a 28 percent drop in asset and wealth management to $609 million.
Fees also declined 20 percent from the fourth quarter, including a 40 percent drop in foreign exchange.
BlackRock 1Q Profit Falls 65%
BlackRock , the largest publicly traded U.S. asset manager, said first-quarter profit dropped 65 percent as falling markets pressured revenue.
The results were in line with Wall Street expectations but accentuated the difficulties asset managers face as markets decline and investors sell risky holdings and buy safer instruments.
BlackRock posted quarterly net income of $84 million, or 62 cents a share, compared with $241 million, or $1.77 a share, a year earlier. Revenue fell 24 percent to $987 million.
Stripping out restructuring charges and other items, BlackRock earned 81 cents a share, matching analysts' average forecast, according to Reuters Estimates.
Assets under management fell 6 percent from a year earlier, to $1.283 trillion.
BlackRock shares have suffered less than the broader market this year. The shares have fallen 2.2 percent so far in 2009, compared with a 4.6 decline in the Standard & Poor's 500 index. The shares closed at $123.59 on Monday.
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U.S. Bancorp Profit Slumps on Loan Losses
U.S. Bancorp , one of the 10 largest U.S. banks, reported better-than-expected quarterly results despite rising loan losses that caused profit to slump more than 60 percent.
The strong mortgage activity helped to offset losses from lease financing, construction and development loans, and credit cards.
The bank also put aside $1.3 billion for loan losses, $833 million more than a year earlier, as declining home prices affected both consumer and commercial loan portfolios.
Profit for common shareholders fell to $419 million, or 24 cents per share, from $1.08 billion, or 62 cents per share, a year earlier, the bank said on Tuesday. Analysts, on average, expected the Minneapolis-based company to earn 20 cents a share.
The bank put aside $1.3 billion for loan losses, $833 million more than a year earlier, as declining home prices affected both consumer and commercial loan portfolios.
"Credit costs continued to rise this quarter—an expected consequence of the weak economy and the primary contributor to the reduction in net income year-over-year,'' Chief Executive Richard Davis said.
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U.S. Bancorp also lost $198 million from an investment in a large domestic bank's perpetual preferred stock, after that bank was downgraded in the quarter.
The bank's mix of businesses is less directly exposed to the health of consumer borrowers than that at many rivals.
At Monday's close, the stock had fallen 36 percent this year.
Forest Earnings Down
Forest Laboratories said its fiscal fourth-quarter earnings fell as lower sales of its antidepressant Lexapro eroded higher sales of its drugs for Alzheimer's disease and hypertension.
Net profit in the quarter ended March 31, 2009 fell to $92.8 million, or 31 cents a share, from $172.8 million, or 55 cents a share a year ago. Revenue fell to $965.5 million from $990.9 million a year ago. Excluding one-time items, the company earned 76 cents a share. Analysts had on average expected earnings of 75 cents a share, according to Reuters Estimates.
The company took a charge of 45 cents a share related to an ongoing investigation by the U.S. Department of Justice into the company's promotional activities.
The company said it expects earnings in the year ended March 31, 2010, of $3.45 to $3.55 a share and revenue of about $4.1 billion. Analysts had on average forecast fiscal 2010 earnings of $3.50 a share on revenue of $4.2 billion.
Net sales for the quarter slipped to $896.7 million, from $898.7 million a year ago.
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KeyCorp Loss Wider Than Expected
The company said net loss attributable to common shareholders was $536 million, or $1.09 per share, and compared with a profit of $218 million, or 54 cents, a year earlier.
Results included a noncash after-tax charge of $187 million, or 38 cents per share, for intangible assets impairment. Analysts on average forecast a loss 20 cents per share, according to Reuters Estimates.
The company plans to cut its quarterly dividend on common shares to 1 cent from 6.25 cents starting in the second quarter. The move is expected to translate into annualized savings of $100 million.
In the first quarter, loan loss provision was $875 million totaling $2.2 billion, or 2.97 percent of total loans, the company said.
Analysts said first-quarter results were weaker than expected mainly because its commercial credit trends were weaker than expected in the national banking line of business.
KeyCorp's national banking operations recorded a net loss of $571 million in the first quarter, compared with $24 million a year ago.
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Northern Trust Profit Down 60%, Misses View
Northern Trust reported a 60 percent decline in first-quarter earnings, falling well short of expectations, as plunging stock markets slashed money management fees.
The Chicago bank, which serves institutional investors and the wealthy, said net income fell to $161.8 million, or 61 cents a share, from $385.2 million, or $1.71 a share, a year earlier. Excluding a $244 million gain last year from the sale of Visa stock, earnings fell 30 percent.
Results in the most recent period also were impacted by dividends paid on preferred stock sold to the U.S. Treasury, which reduced earnings by 10 cents a share.
Fees from managing assets for very wealthy individuals fell 11 percent to $203.7 million. Revenue from managing investment funds fell 19 percent amid broad market declines.
Net interest income, the profit that banks earn on loans and bonds, grew 8 percent to $287.7 million. Northern Trust said balance sheet growth helped offset thinner margins.
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Analysts on average had expected Northern Trust to earn 96 cents a share, according to Reuters Estimates.
Northern shares have climbed 12 percent this year but are down 20 percent over the past 12 months.
State Street Profit Drops, Unrealized Losses $5.9 Billion
State Street , one of the world's biggest institutional investors, reported a 10 percent drop in quarterly profit Tuesday and said that it had $5.9 billion in unrealized losses in its investment portfolio.
Net profit shrunk to $476 million, from $530 million a year before, while earnings per share stood at $1.02, down from $1.35 a year earlier. Operating earnings were $1.04 per share, better than the $1.02 analysts had expected but still down 25 percent from a year earlier.
The company said unrealized losses in its investment portfolio stood at $5.9 billion, down modestly from $6.3 billion at the end of the fourth quarter.
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Unrealized losses in the State Street-administered asset-backed commercial paper conduits were $3.6 billion, unchanged from the end of December.
A recent change in mark-to-market accounting rules was seen helping State Street.
Delta Posts $794 Million Quarterly Loss
Delta Air Lines said it still expected a profit for the year despite reporting a first-quarter net loss of $794 million, helping to push up its shares by 12.5 percent in early trading Tuesday.
The world's biggest airline, reporting its first quarterly results since merging with Northwest Airlines in October, said the loss was the result of a drop in travel demand and adverse fuel hedges. Including special items, however, it broke even.
Delta, which said it was on track to fully integrate its business, reported a 15 percent drop in combined operating revenue compared with a year earlier, while capacity on a combined basis fell 6 percent.
On a combined basis, operating expenses declined by $1.1 billion, due mainly to lower fuel costs.
The net loss was 96 cents per share. Analysts had expected a loss of $1.00 per share, according Reuters Estimates.
To cut costs as it combines its business, Delta said that more than 2,500 employees accepted early-out and early retirement packages, and are expected to leave the airline next fall.
Delta also said it would ground its fleet of 14 747-200 cargo aircraft at the end of 2009 due to the aircraft's age and inefficiency, and will start charging international travelers $50 to check a second bag beginning July 1 to raise $100 million.
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Lockheed Martin , the top defense contractor, reported a lower first-quarter profit as pension costs increased, but it raised its full-year earnings forecast, citing a lower share count as a result of stock repurchases.