This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Northern Trust Management Discusses Q2 2012 Results - Earnings Call Transcript

Now for our Safe Harbor statement. What we say during today's conference call may include forward-looking statements, which are Northern Trust's current estimates and expectations of future events or future results. Actual results, of course, could differ materially from those indicated by these statements because the realization of those results is subject to many risks and uncertainties. I urge you to read our 2011 annual report and our periodic reports to the Securities and Exchange Commission for detailed information about factors that could affect actual results.

Thank you again for joining us today, and let me turn the call over to Mike O'grady.

Michael G. O'grady

Good morning, everyone. Let me join Bev in welcoming you to the Northern Trust second quarter 2012 earnings conference call. Our second quarter results of earnings per share of $0.73 and a return on equity of 9.9% reflect continued progress on many fronts. Growth in trust, investment and other servicing fees was strong, driven by new business from both personal and institutional clients.

Execution on our driving performance initiatives remains a critical priority, and we made further progress in the second quarter on both the revenue and expense side, and profitability improved with our pretax margin increasing to 27.7%. This performance was against the ongoing backdrop of a mixed operating environment.

Equity markets were weak in the second quarter, following positive performance in each of the 2 preceding quarters. The S&P 500 was down 3%, and the IFA was down 7%. This weakness had a negative impact on the market value of client assets, as did the strengthening of the dollar. Assets under custody ended the second quarter at $4.6 trillion, down 1% sequentially but up 3% year-over-year, and assets under management ended at $704 billion, down 2% sequentially but up 3% year-over-year.

Fees, overall, benefited from the prior quarter's positive market performance, given that some fees are calculated on the basis of month or quarter lag asset values. Foreign exchange volatility in volumes continue to be low, impacting our foreign exchange trading income. Interest rates remain low, placing continued pressure on our net interest margin and resulting in ongoing fee waivers on our money market funds, albeit lower in the second quarter than the first quarter.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 18,126.12 -36.87 -0.20%
S&P 500 2,120.79 -2.69 -0.13%
NASDAQ 5,097.9760 -8.6170 -0.17%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs