State Street misses 4Q earnings estimates
State Street Corp. (STT) earned $371 million in the fourth quarter, or 76 cents a share, as the financial holding corporation kept expenses in check and ended a challenging year in the markets. Fourth-quarter results reflected expense-control measures to adjust for its outlook on its capital markets-facing businesses in 2012. That resulted in pre-tax charges of $120 million, or 15 cents a share, State Street said. Analysts polled by MarketWatch and Yahoo Finance estimated earnings at 94 cents a share. “Overall, 2011 was a very successful year amid extremely challenging market conditions. Revenue in the year was characterized by a strong first half followed by a weaker second half, the result of volatile markets and risk-averse investor behavior. Despite these conditions, comparing 2011 with 2010, we were able to achieve strong growth in both revenue and earnings per share,” said Joseph L. Hooley, State Street's chairman, president and CEO. Fourth-quarter 2011 revenue of $2.315 billion increased 13% from $2.043 billion in the fourth quarter of 2010. State Street recorded $58 million, or 8 cents a share, of pre-tax charges during the fourth quarter associated with its business operations and information technology transformation program. The company said earnings per share in the fourth quarter last year (16 cents) reflected the effects of a fourth-quarter 2010 investment portfolio repositioning and separate fourth-quarter 2010 restructuring charges. For the full year, the financial holding corporation earned $1.92 billion, or $3.79 a share, up 23% over 2010. Revenue of $9.6 billion in full-year 2011 increased 7% from $8.95 billion in 2010 and expenses were $7.06 billion, up 3% from $6.84 billion in 2010. Return on average common shareholders’ equity was 10% in 2011 and 9.5% in 2010. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.