State Street Ready for a New Activist

Last week, State Street (STT) reported a disappointing first quarter, along with a mediocre outlook. Top-line revenue growth continued to be muted due to low interest rates and modest levels of trading activity. These are not just State Street-related issues, but overall industry-related issues, since Northern Trust (NTRS) and Bank of New York Mellon (BK) suffered similar problems during their respective quarters.

Unfortunately, where State Street lost investors for the quarter was on expenses and earnings. Expenses rose 5.8% compared with a 1.3% increase for revenues. Net income per share came in below estimates at $0.99 vs. $1 consensus estimates. Analysts are now reducing 2014's EPS estimates to $4.86 versus $4.95 prior to the call....448 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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