Less-profitable lending caused
to lower earnings guidance and predict more job reductions.
The big securities custodian expects to earn 27 cents to 29 cents a share, including a number of charges related to its acquisition of a
unit during the quarter. On an operating basis, the company expects to earn 45 cents to 47 cents a share, short of the consensus estimate of 54 cents compiled by First Call.
State Street said revenue fell short of expectations because of compressed interest rate spreads, which reduces its interest income and the money it collects from securities lending. It also cited lower stock market values and a "larger-than-expected slowdown in cross-border investing."
The shares were down 10% to $34.60 on the Instinet premarket session.