Bank of New York Tumbles Even After Beating Fourth-Quarter Estimates

Bank of New York Mellon tumbles even after the financial services company reports fourth-quarter earnings better than analysts' estimates.
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Shares of Bank of New York Mellon (BK) - Get Report were tumbling 7.2% to $47.02 Thursday even after the financial services company beat fourth-quarter earnings estimates.

The bank posted income of $1.44 billion, or $1.52 per share, up from $832 million, or 84 cents per share, a year earlier. Excluding items, the company earned $1.01 per share, beating estimates of 99 cents a share.

Total revenue was $4.78 billion, up from $4 billion a year earlier. Revenue included $790 million of notable items, including a $460 million gain on sale of an equity investment.

Bank of New York Q4 Earnings graphic

Analysts were looking for revenue of $4.24 billion. Fee revenue increased 26%, primarily reflecting the gain on sale of an equity investment.

Total noninterest expense decreased 1% to $3 billion, or increased 2% excluding notable items. The increase primarily reflects the continued investments in technology.

Net interest revenue decreased 8% primarily reflecting the impact of lower interest rates on interest-earning assets and lower noninterest-bearing deposits. This was partially offset by the benefit of lower deposit and funding rates and higher interest-bearing deposits, the company said.

Large U.S. banks that reported results earlier this week also highlighted the hit from lower interest rates after the Federal Reserve cut borrowing costs three times last year against the backdrop of the prolonged U.S.-China trade war, Reuters reported.

"Although we continue to be negatively impacted by lower rates, a flat yield curve and low foreign exchange volatility, we remain intensely focused on carefully managing costs," interim CEO Todd Gibbons said in a statement.

Assets under management totaled $1.9 trillion, up 11% and primarily reflecting higher market values and the favorable impact of a weaker U.S. dollar.