Summary
State Street Corporation's (STT) first quarter 2019 results showed a decline in net income and earnings per share compared to the prior year, primarily due to challenging industry conditions and lower average equity market levels impacting fee revenues. Total revenue decreased by 4% to $2.93 billion, with fee revenue down 6% driven by lower servicing and management fees. Net interest income saw a 5% increase to $673 million, benefiting from higher U.S. interest rates. Expenses increased by 1% to $2.29 billion, partly due to acquisition and restructuring costs related to the CRD acquisition and increased technology spending, though offset by expense savings initiatives. Despite revenue headwinds, State Street continued to return capital to shareholders, declaring a 12% increase in its common stock dividend to $0.47 per share and repurchasing $300 million of its common stock. The company's liquidity and capital positions remained strong, with a Common Equity Tier 1 (CET1) capital ratio of 11.5% and a Tier 1 leverage ratio of 7.4% as of March 31, 2019. Management remains focused on executing expense savings programs to navigate market challenges.
Financial Highlights
38 data points| Revenue | $2.93B |
| Interest Expense | $354.00M |
| Net Income | $508.00M |
| EPS (Basic) | $1.20 |
| EPS (Diluted) | $1.18 |
| Shares Outstanding (Basic) | 377.92M |
| Shares Outstanding (Diluted) | 381.70M |
Key Highlights
- 1Net income decreased by 23% to $508 million, and diluted EPS fell 27% to $1.18 compared to Q1 2018.
- 2Total revenue declined 4% year-over-year to $2.93 billion, impacted by challenging industry conditions and lower equity markets.
- 3Fee revenue decreased by 6% to $2.26 billion, with servicing fees down 12% and management fees down 11%.
- 4Net interest income increased by 5% to $673 million, driven by higher U.S. interest rates.
- 5Total expenses rose 1% to $2.29 billion, influenced by acquisition costs for CRD and technology investments, partially offset by expense savings.
- 6State Street returned $480 million to shareholders through dividends ($177 million) and share repurchases ($300 million).
- 7CET1 capital ratio stood at 11.5%, and Tier 1 leverage ratio at 7.4% as of March 31, 2019.