Published July 19, 2013
Lifted by higher fees and dipping compensation costs, State Street (STT) logged a 19% jump in second-quarter profits on Friday and posted stronger-than-expected adjusted-earnings.
Despite the earnings beat, previously red-hot shares of the Boston-based bank retreated about 1% during early trading.
State Street said it earned $571 million, or $1.24 a share, last quarter, compared with a profit of $480 million, or 98 cents a share, a year earlier.
Excluding one-time items, it earned $1.24 a share, up from $1.01 the year before and above the Street’s view of $1.19.
Revenue rose nearly 6% to $2.56 billion, essentially meeting consensus calls from analysts for $2.54 billion.
In a statement, State Street CEO Joseph Hooley said: “Seasonal factors and increased market volatility benefited our securities finance and foreign exchange businesses.”
The bank said expenses dipped to $1.8 billion during the second quarter, compared with $1.83 billion in the first quarter and $1.77 billion in the year-earlier period. Compensation and employee benefit expenses fell 2.7% year-over-year to $917 million.
Meanwhile, State Street increased servicing fees 10.6% to $1.2 billion last quarter, while management fees jumped 12.6% to $277 million.
Shares of State Street fell 1.42% to $69.10 Friday morning, trimming their impressive 2013 rally to 47%.