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State Street (STT) Beats on Q2 Earnings, Revenue Rise Y/Y

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Have you been eager to see how State Street Corporation (STT - Free Report) performed in Q2 in comparison with the market expectations? Let’s quickly scan through the key facts from this MA -based popular company’s earnings release this morning:

An Earnings Beat

State Street came out with adjusted earnings of $2.05 per share, which beat the Zacks Consensus Estimate of $2.01.

Rise in revenues primarily supported the results.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for State Street depicted a bearish stance prior to the earnings release. The Zacks Consensus Estimate moved marginally downward over the last 30 days.

Nonetheless, State Street has a decent earnings surprise history. Before posting the earnings beat in Q2, the company delivered positive surprises in all four trailing quarters, with an average beat of 5.5%.

State Street Corporation Price and EPS Surprise

 

State Street Corporation Price and EPS Surprise | State Street Corporation Quote

Revenue Came in Lower than Expected

State Street posted revenues (on GAAP basis) of $3.03 billion, which lagged the Zacks Consensus Estimate of $3.07 billion. However, the figure was 7.7% above the prior-year quarter.

Key Q2 Statistics
 

  • Results exclude $77 million or 17 cents per share of repositioning charge related to organizational realignment. Including this, earnings were $1.88 per share
  • New asset servicing mandates totaled $1.5 trillion year to date
  • Assets under custody and administration were $33.9 trillion as of Jun 30, 2018
  • Assets under management were $2.72 billion as of Jun 30, 2018


Other Developments

State Street now expect $200 million in savings in 2018 through its cost savings initiative – Beacon. Previously, the company had guided to achieve $150 million in savings.

Additionally, State Street announced a deal to acquire Charles River Development for $2.6 billion. The deal is expected to result in revenues and expense synergies and will be accretive to State Street’s earnings in 2020. Additionally, to the finance the deal, the company announced suspension of share buybacks through the end of the year.

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for State Street. However, is since the latest earnings performance yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Check back later for our full write up on this State Street earnings report!

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