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State Street (STT) Q3 Earnings & Revenue Lags Estimates

Have you been eager to see how State Street CorporationSTT performed in Q3 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 Miss

State Street came out with operating earnings of $1.16 per share, which missed the Zacks Consensus Estimate of $1.25.

A rise in expenses was mainly responsible for this.

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 had fallen 3.1% over the last 30 days.

However, State Street has a decent earnings surprise history. Before posting the earnings miss in Q3, the company delivered positive surprises in three of the trailing four quarters, with an average beat of 7.92%.

Revenue Came In Lower than Expected

State Street posted revenues of $2.6 billion, which was below the Zacks Consensus Estimate of $2.7 billion.

Key Developments

  • New asset servicing mandates Q3 totaled approximately $141 billion.
  • In asset management, net outflows totaled $29 billion.
  • Remains focused on enhancing shareholder value, with repurchase of $350 million worth of shares.
  • Significantly lowered the level of deposits on its balance sheet during Q3.

State Street announced a multi-year plan to accelerate the next phase of its transformation program to generate roughly $500 million in annualized savings once fully implemented.

Moreover, in order to better calibrate State Street's expenses to the current environment, it plans to reduce nearly 600 positions on gross basis. The plan, expected to be completed by next year-end, will lead to saving of $50 million annually.

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #4 (Sell) for State Street. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look unfavorable, it all depends on what sense the just-released report makes to the analysts.

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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