State Street (STT Quick QuoteSTT - Free Report) is scheduled to announce fourth-quarter and 2025 results on Jan. 16, before market open. The company’s quarterly revenues and earnings are expected to have risen year over year.

In the third quarter, STT’s earnings outpaced the Zacks Consensus Estimate. Results were aided by growth in fee revenues and lower provisions. Also, the company witnessed improvements in the total assets under custody and administration (AUC/A) and assets under management (AUM) balances.

State Street has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, delivering a surprise of 6%, on average.

The Zacks Consensus Estimate for State Street’s fourth-quarter earnings of $2.82 per share has been unchanged over the past seven days. The figure suggests 8.5% growth from the year-ago quarter’s actual.

The consensus estimate for 2025 earnings is pegged at $10.17, which suggests year-over-year growth of 17.3%.

The consensus estimate for quarterly sales of $3.59 billion indicates a 5.3% year-over-year increase. The consensus estimate for full-year sales of $13.88 billion indicates 6.1% year-over-year growth.

Key Q4 Developments for STT

In November, State Street entered a strategic co-operation agreement with Albilad Capital to support the latter’s securities services offerings in Saudi Arabia, reaching a milestone in its long-term investment and commitment to the Kingdom’s growing financial sector.

By integrating State Street’s global product suite with Albilad Capital’s deep local expertise, the partnership aims to enhance operational efficiency, improve market competitiveness and accelerate the development of the Kingdom’s capital markets.

In the same month, State Street acquired its long-standing partner, PriceStats, a top provider of daily global inflation data generated from digitally collected prices on millions of consumer products.

PriceStats’ offering has been an integral component of the State Street Markets research platform since 2011 and is largely used by Institutional investors, economists and central banks.

In October, State Street acquired global custody and related businesses outside of Japan from Mizuho Financial Group, Inc. These businesses aid the international investments of Mizuho’s Japanese clients. The financial terms of the deal were kept under wraps.

State Street took control of Mizuho’s offshore securities services businesses, including global custody services, Cayman, Bahamas and Luxembourg-domiciled cross-border fund servicing, a European securities agency business and sub-custodian and securities lending services in the United States.

Major Factors to Consider for State Street’s Q4 Earnings

Net Interest Income (NII): In the fourth quarter, the Federal Reserve cut interest rates twice. This, along with a rate cut in September, lowered rates to 3.50-3.75%. While this is likely to have hurt STT’s NII to some extent in the quarter, a solid lending scenario (per the Fed’s latest data, overall loan growth was robust) and stabilizing funding/deposit costs are expected to have offered the much-needed support.

Hence, despite declining rates, State Street’s NII is expected to have risen in the quarter, supported by stabilizing funding costs and robust loan growth, along with the company’s investment portfolio repositioning efforts.

The Zacks Consensus Estimate for the company’s average interest-earning assets for the fourth quarter is pegged at $307.3 billion, which implies a 10.3% rise from the prior-year quarter.

The consensus estimate for NII (on a fully taxable-equivalent or FTE basis) of $770 million indicates a 2.8% year-over-year rise.

Excluding notable items, management expects 2025 NII to decline marginally from 2024.

Fee Revenues: The performance of the foreign exchange (FX) trading markets was robust in the fourth quarter, which is expected to have boosted State Street’s FX trading services income. The consensus estimate for FX trading services income is pegged at $393 million, suggesting a 9.2% year-over-year rise.

Further, supported by market appreciation and decent inflows, the company’s AUM and AUC/A balances are expected to have increased in the to-be-reported quarter. Thus, management fees are likely to have benefited. The consensus estimate for management fees of $633 million implies a 10% year-over-year jump.

The Zacks Consensus Estimate for servicing fees of $1.39 billion indicates a 8.4% improvement. Management expects to generate $350-$400 million in new servicing fee revenues in 2025.

The consensus estimate for software and processing fees suggests a 2.7% decline to $252 million. The Zacks Consensus Estimate for securities finance revenues of $128 million suggests an 8.5% increase from the year-ago quarter.

Overall, the Zacks Consensus Estimate for total fee revenues of $2.84 billion indicates 6.8% year-over-year growth.

Excluding notable items, the company expects total fee revenues to increase 8.5-9% year over year in 2025. In fourth-quarter 2025, fee revenues are expected to have been stable or decline slightly from the previous quarter, reflecting a normalization in other fee revenues from an elevated third quarter, while suggesting a sequential increase in NII.

Expenses: Higher information systems and communication expenses, and the company’s strategic buyouts and investments in franchises are expected to have led to an overall rise in total expenses in the fourth quarter.

Despite the company taking measures to improve operating efficiency (which will lead to $500 million in cost savings in 2025), its continued incremental investments in business growth, infrastructure and technology are expected to have resulted in higher costs in the to-be-reported quarter.

Management expects adjusted expenses to be slightly up in the fourth quarter sequentially. Given the projected rise in revenue-related costs, 2025 adjusted expense growth is anticipated to be 4.5%.

What the Zacks Model Unveils for State Street

Per our model, the likelihood of State Street beating the Zacks Consensus Estimate this time around is high. This is because the company has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for State Street is +0.33%.

Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

State Street’s Peers Worth a Look

Here are a couple of STT’s peer stocks that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this time:

KeyCorp (KEY Quick QuoteKEY - Free Report) is slated to report fourth-quarter 2025 results on Jan. 20. The company has a Zacks Rank #2 (Buy) at present and an Earnings ESP of +1.20%.

Quarterly earnings estimates for KEY have been unchanged at 38 cents over the past week.

The Earnings ESP for Northern Trust Corporation (NTRS Quick QuoteNTRS - Free Report) is +1.33% and it carries a Zacks Rank #3 at present. The company is slated to report fourth-quarter 2025 results on Jan. 22.

Over the past seven days, the Zacks Consensus Estimate for Northern Trust’s quarterly earnings has been revised upward to $2.37.