State Street Falls, Comerica Incorporated Jumps After Earnings
State Street Corporation (NYSE:STT) this morning reported a 9% decline in its first-quarter earnings, which missed analysts’ estimates. The latest quarter was hurt by a fall in foreign exchange revenue and servicing fees.
The company said that it earned $427 million, or 85 cents a share, down from a year ago profit of $471 million, or 93 cents a share. On an operating basis, earnings per share stood at 84 cents, down 5% from 88 cents a year ago missing analysts’ estimates by 3 cents.
Revenue during the quarter grew marginally to $2.42 billion from $2.36 billion a year ago, ahead of analysts’ estimates of $2.33 billion. Total expenses increased to $1.84 billion from last year’s $1.7 billion.
State Street’s servicing fees were down 2% year-over-year to $1.08 billion and Investment management fees generated by State Street Global Advisors were $236 million, flat with the year-ago period.
Joseph Hooley, State Street’s chairman, president and chief executive officer, said, “During the first quarter our core business momentum in asset servicing and asset management improved, compared to the second half of last year. Our success in winning new business is reflected in solid growth in both fee and total revenue. During the first quarter we won mandates for $233 billion in assets to be serviced. State Street Global Advisors (SSgA) won net new business of $41 billion, excluding the impact of the planned $31 billion reduction in assets managed for the Department of the U.S. Treasury.”
Comerica Incorporated(NYSE:CMA) shares climbed in the pre-market session after the company reported a 26% jump in its first-quarter earnings, thanks to solid loan growth and a sharp decline in loan-loss provisions.
The company posted a profit of $130 million, up from $103 million a year. On a per-share basis, earnings climbed to 66 cents from 57 cents. The year-earlier period included 12 cents in restructuring and acquisition charges. Analysts were projecting the company to earn 55 cents a share.
The company loan book grew by of 1% on a period-end basis, driven by a 3% increase in commercial loans. Loan-loss provisions fell to $23 million from $49 million a year earlier. In the fourth quarter, loan-loss provisions were $19 million.
Net-charge offs, or loans the company doesn’t think are collectible, were at the lowest level since the third quarter of 2007, falling to 43% of average loans from 103% a year earlier and 57% in the prior quarter.
Shares of CMA are up 7% to $33.01 in the pre-market session.