Updated with additional information.
NEW YORK (
Bank of New York Mellon
(BK - Get Report)
on Wednesday reported continuing growth of assets under management and servicing fees, but also reported a preannounced net loss and missed the consensus estimate for first-quarter operating earnings.
The company reported a first-quarter net loss applicable to shareholders of $253 million, or 23 cents a share, compared to earnings of $646 million, or 53 cents a share in the fourth quarter, and $617 million, or 52 cents a share, in the first quarter of 2012.
Excluding a previously announced $854 million charge for disallowed tax credits, first-quarter operating earnings were $588 million, or 50 cents a share, missing the consensus estimate of 52 cents, among analysts polled by Thomson Reuters.
Total adjusted revenue was $3.597 billion in the first quarter, declining from $3.606 the previous quarter and $3.635 billion a year earlier. Investment servicing fees increased to $1.651 billion in the first quarter from $1.595 billion in the fourth quarter, and $1.633 billion in the first quarter of 2012.
First-quarter investment management and performance fees totaled $822 million, declining from $853 million the previous quarter, but increasing from $745 million a year earlier.
Adjusted noninterest expense totaled $2.7 billion in the first quarter, increasing from $2.68 billion in the fourth quarter, and $2.55 billion in the first quarter of 2012.
The company's assets under management increased 3% sequentially and 9% year-over-year, to $1.4 trillion as of March 31. Assets under custody or administration were unchanged from the previous quarter, but grew 2% year-over-year to $26.3 trillion.
Bank of New York Mellon's shares closed at $27.76 Tuesday, returning 9% this year, following a 32% return during 2012. The shares trade for 2.2 times their reported March 31 tangible book value of $12.47, and for 10.8 times the consensus 2014 EPS estimate of $2.58. The consensus 2013 EPS estimate is $2.28.
The company previous raised its quarterly dividend to 15 cents a share, for a yield of 1.04%, based on Tuesday's closing price. Bank of New York Mellon in March announced that it had been approved by the Federal Reserve for up to $1.35 billion in share buybacks through the first quarter of 2014.
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-- Written by Philip van Doorn in Jupiter, Fla.