Bank of New York Mellon's Adjusted Profit Tops Wall Street Estimates

Bank of New York Mellon Corp. (BK) - Get Report said Wednesday that its fourth-quarter earnings per share dropped 22% from a year ago, but adjusted profit beat Wall Street's expectations.

The New York-based financial institution reported net income of $832 million, or 84 cents a share, down from $1.13 billion, or $1.08 a share, a year ago. Total revenue increased 7.5% to $4 billion.

The fourth quarter of 2017 included $181 million, or 17 cents a share, for a net benefit of U.S. tax legislation, offset by severance, litigation and other charges, the bank said.

Excluding items, the bank reported adjusted earnings of $987 million, or 99 cents a share, in the fourth quarter. Analysts were expecting the company to earn 93 cents a share.

Charlie Scharf, chairman and CEO, said in a statement that the fourth quarter of 2017 "included a series of notable items that make comparisons difficult."

"Excluding these items, earnings per share grew by 9%," Scharf said. "The underlying performance of our businesses was mixed as our revenue declined, but we continued to maintain strong expense discipline. In addition, we benefited from a lower tax rate and our ongoing ability to return capital to shareholders through buybacks."

Looking forward, Scharf added, "we are cautious regarding how the economic and market environment will impact our business in 2019."

"We will remain keenly focused on managing our expense base. Our ongoing drive toward efficiency will allow us to continue to increase our investment in technology and infrastructure without meaningfully impacting the total cost base," he said.

Shares of Bank New York Mellon increased 2.1% to $50.43 by the close of trading on Wednesday.