What was State Street's net income and earnings per share for the second quarter of 2004?

For the three months ended June 30, 2004, State Street reported a net income of $220 million, or $0.65 per diluted share. This represents a significant turnaround from the net loss of $23 million, or $-0.07 per diluted share, reported in the same period of 2003.

How did total revenue change compared to the previous year?

Total revenue for the second quarter of 2004 increased by 19% to $1.29 billion, compared to $1.08 billion in the second quarter of 2003. This growth was primarily driven by a 19% increase in total fee revenue to $1.05 billion.

What were the main drivers of the revenue growth in the second quarter of 2004?

Revenue growth was broad-based, with increases across most fee categories. Servicing fees were up 18% to $570 million, management fees increased 18% to $153 million, and securities lending revenue rose 17% to $89 million. Foreign exchange trading revenue also saw a 13% increase.

How did operating expenses perform in the second quarter of 2004?

Total operating expenses decreased by 16% to $953 million in the second quarter of 2004, compared to $1.14 billion in the prior year's quarter. This reduction was largely due to the absence of significant restructuring costs that were incurred in the second quarter of 2003.

What is the company's outlook for the remainder of 2004?

State Street noted that while favorable market conditions in the first half of 2004 contributed to strong revenue growth, market conditions may not be as favorable in the second half of the year. The company also anticipates incurring implementation expenses related to the conversion of new large investment operations outsourcing clients.

STT/STT-PG 10-Q Quarterly Report Q2 FY2004

Summary

STATE STREET CORP (STT) reported a strong financial performance for the second quarter and first six months of 2004, a significant turnaround from a loss in the prior year's comparable periods. For the three months ended June 30, 2004, the company generated a net income of $220 million ($0.65 per diluted share), compared to a net loss of $23 million ($-0.07 per diluted share) in the same period of 2003. Total revenue increased by 19% to $1.29 billion, driven by a substantial rise in fee revenue, up 19% to $1.05 billion. This growth was supported by increases across all fee categories, notably servicing fees and management fees. The six-month period ending June 30, 2004, also showed significant improvement, with net income of $437 million ($1.28 per diluted share), a substantial increase from $73 million ($0.22 per diluted share) in the first six months of 2003. Total revenue grew by 19% to $2.51 billion, fueled by a 23% increase in total fee revenue to $2.06 billion. The company highlighted the successful integration of the Deutsche Bank Global Securities Services (GSS) business and strong performance in both its Investment Servicing and Investment Management segments.

Key Highlights

1State Street reported a significant net income of $220 million ($0.65 per diluted share) for the three months ended June 30, 2004, a substantial improvement from a net loss of $23 million ($-0.07 per diluted share) in the prior year's quarter.
2Total revenue for the second quarter of 2004 increased by 19% to $1.29 billion, driven by a 19% rise in total fee revenue to $1.05 billion, indicating broad-based growth across business segments.
3For the first six months of 2004, net income was $437 million ($1.28 per diluted share), a substantial increase from $73 million ($0.22 per diluted share) in the same period of 2003.
4The company's Investment Servicing segment, representing 85% of total revenue for the six months, showed robust growth with servicing fees up 22% year-over-year.
5Investment Management revenue also saw strong growth, with management fees up 37% on an operating basis for the six months, reflecting new business success and favorable market valuations.
6Total operating expenses for the second quarter decreased by 16% to $953 million, primarily due to the absence of significant restructuring costs incurred in the prior year, partially offset by increased salaries and transaction processing costs.
7The company's Balance Sheet remains strong, with total assets of $94.14 billion as of June 30, 2004, and stockholders' equity of $5.91 billion.

STATE STREET CORP Quarterly Report for Q2 Ended Jun 30, 2004

Summary

Key Highlights

Frequently Asked Questions