This Day On The Street
Continue to site right-arrow
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
TheStreet Open House

State Street Fees Boost Bottom Line (Update 1)

Stocks in this article: STT

Updated with early market action and comment from Jefferies analyst Ken Usdin.

NEW YORK ( TheStreet) -- State Street (STT - Get Report) of Boston on Friday announced a 15% year-over-year increase in operating earnings, which CEO Joseph Hooley said reflected "continued resilience across our asset servicing and asset management businesses."

On an operating basis, State Street reported fourth-quarter operating earnings available to common shareholders of $521 million, or $1.11 a share, beating the consensus estimate of a dollar a share, among analysts polled by Thomson Reuters.

Operating earnings grew from $473 million, or 99 cents a share, in the third quarter, and $454 million, or 93 cents a share, in the fourth quarter of 2011.

The company's shares were up 5% in early trading, to $52.85.

Fourth-quarter GAAP earnings available to common shareholders of $468 million, or a dollar a share, included acquisition and restricting costs totaling $139 million, "primarily related to severance and benefits costs for targeted staff reductions expected to be substantially completed during 2013," which is expected to result in 630 staff positions being eliminated.

Investment management fees -- again, on an operating basis -- grew 4% sequentially and 29% year-over-year, to $260 million in the fourth quarter, with the year-over-year increase "primarily due to stronger equity markets, net new business, and higher performance fees."

Trading services revenue totaled $260 million in the fourth quarter, increasing from $232 million in the third quarter, but declining from $273 million in the fourth quarter of 2011, "primarily due to weakness in foreign-exchange trading, partially offset by stronger brokerage and other fees."

Fourth-quarter processing fees (and other revenue) increased to a tax-adjusted $115 million, from $84 million the previous quarter and $60 million a year earlier, with the sequential increase mainly reflecting "higher revenue from joint ventures as well as a gain of $10 million from the sale of a Lehman Brothers-related asset," but also including "a tax-equivalent adjustment of $36 million related to tax credits generated by tax-advantaged investments." The year-over-year increase reflected a $25 million negative fair-value adjustment in the prior-year period, as well as the fourth-quarter 2012 tax-equivalent adjustment.

The company's tax-adjusted net interest revenue was $600 million in the fourth quarter, declining from $611 million in the third quarter, but increasing from $577 million a year earlier, increased to The net interest margin narrowed to 1.36% in the fourth quarter from 144% the previous quarter and 1.40% a year earlier. The year-over-year increase reflected an increase in earning assets.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs