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State Street's Second Quarter Earnings Report
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State Street (NYSE:STT) announced its results for the most recent quarter on July 17, 2012. State Street provides a range of investment management strategies, investment management advisory services and other financial services.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Everything Investors Need To Know About Earnings
The Numbers: Though State Street's EPS fell short of estimates, the company's revenues came in line with analyst predictions. The company reported 98 cents per share versus the 99 cents per share estimate and revenues of $2.43 billion versus the $2.42 billion estimate. Revenue fell 9.5% from the same period last year while EPS is down 2%. State Street saw falling revenues last quarter after rising 0.3% to $2.56 billion the quarter before. State Street's net income for the second quarter fell 4.5% from last year's figures to $490 million. This marks the second quarter in a row that the company's net income has fallen after profits tumbled 9.3% in the first quarter.
Management Quote: Joseph L. Hooley, State Street's chairman, president and chief executive officer, said, "During the second quarter our business performed well in a challenging economic environment which included increasing weakness in international markets. Compared to the first quarter of 2012, we achieved positive operating leverage due primarily to the reduction in compensation expenses, solid overall expense management and continued business momentum fueled by the impact of new business installations in our core asset servicing and asset management businesses."
A Look Back: Net income has increased 73.1% year-over-year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed more than fourfold from the year-earlier quarter.
Looking Ahead: Over the past 60 days, the outlook for the company's performance next quarter has become increasingly unfavorable. The average estimate for the third quarter is $1 per share, a drop from $1.02. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. The average estimate for the fiscal year is $3.88 per share, down from $3.93 90 days ago.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Everything Investors Need To Know About Earnings
The Numbers: Though State Street's EPS fell short of estimates, the company's revenues came in line with analyst predictions. The company reported 98 cents per share versus the 99 cents per share estimate and revenues of $2.43 billion versus the $2.42 billion estimate. Revenue fell 9.5% from the same period last year while EPS is down 2%. State Street saw falling revenues last quarter after rising 0.3% to $2.56 billion the quarter before. State Street's net income for the second quarter fell 4.5% from last year's figures to $490 million. This marks the second quarter in a row that the company's net income has fallen after profits tumbled 9.3% in the first quarter.
Management Quote: Joseph L. Hooley, State Street's chairman, president and chief executive officer, said, "During the second quarter our business performed well in a challenging economic environment which included increasing weakness in international markets. Compared to the first quarter of 2012, we achieved positive operating leverage due primarily to the reduction in compensation expenses, solid overall expense management and continued business momentum fueled by the impact of new business installations in our core asset servicing and asset management businesses."
A Look Back: Net income has increased 73.1% year-over-year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed more than fourfold from the year-earlier quarter.
Looking Ahead: Over the past 60 days, the outlook for the company's performance next quarter has become increasingly unfavorable. The average estimate for the third quarter is $1 per share, a drop from $1.02. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. The average estimate for the fiscal year is $3.88 per share, down from $3.93 90 days ago.
by
Investopedia Staff
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