Updated with market close information.
Bank of New York Mellon reported second-quarter net income applicable to common shareholders of $466 million, or 39 cents a share, including a previously announced litigation charge of $212 after tax, or 18 cents a share. Excluding the litigation charge, operating earnings of 57 cents a share beat the consensus estimate of a 53-cent profit, among analysts polled by Thomson Reuters.
The company's earnings applicable to common shareholders declined from $619 million, or 52 cents a share, in the first quarter, and $735 million, or 59 cents a share, during the second quarter of 2011.Bank of New York Mellon reported that its investment services fees totaled $1.7 billion during the second quarter, increasing 2% from the previous quarter but declining 5% from a year earlier. The sequential increase "resulted from higher Depositary Receipts revenue, net new business, seasonally higher securities lending revenue and higher Clearing Services fees, partially offset by lower equity market values and transaction volumes," while "the year-over-year decrease was primarily driven by the impact of the sale of the Shareowner Services business in the fourth quarter of 2011, lower Depositary Receipts revenue and higher money market fee waivers, partially offset by higher Clearing Services fees and net new business." Investment management and performance fees increased and 2% year-over-year and 7% sequentially, "driven by higher performance fees," as "investment management fees decreased 2% year-over-year and increased 2% sequentially," with the year-over-year decline being "primarily due to lower equity market values, partially offset by net new business," while "sequentially, the increase was primarily due to net new business and higher money market fees, partially offset by lower equity market values. Bank of New York Mellon reported that its second-quarter return on common equity -- "excluding amortization of intangible assets and M&I, litigation and restructuring charges" -- was 8.9% during the second quarter, unchanged from the previous quarter, but declining from 10.1% a year earlier.
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