State Street (NYSE:STT) stock slid 3.2% in Friday premarket trading as the custodian bank’s second-quarter revenue fell short of the average analyst estimate as net interest income fell during the quarter, though earnings topped expectations as fee revenue perked up and expenses pulled back.
Q2 adjusted EPS of $2.17, exceeding the $2.10 consensus, climbed from $1.52 in Q1 and from $1.91 in the year-ago quarter. Revenue of $3.11B, vs. $3.13B expected, advanced from $3.10B in Q1 and from $2.95B a year earlier.
“Quarter-over-quarter we saw good fee momentum across a number of our businesses, helped by accelerated onboarding of our to-be-installed AUC/A pipeline, while we continued to invest and serve our clients,” said Chairman and CEO Ron O’Hanley.
During the quarter, State Street (STT) returned about $1.3B to shareholders through share buybacks and dividends, he added, noting the company intends to continue to pursue its share repurchase authorization of up to $4.5B this year.
Fee income of $2.42B increased 4% Q/Q and 2% Y/Y.
Assets under custody or administration came in at $39.6T, up 5% from the prior quarter and 4% from the year-earlier period.
Net interest income was $691M compared with $766M in Q1 and $584M in Q2 of last year.
Total expenses of $2.21B fell from $2.37B in Q1 and rose from $2.11B a year before.