Post Earnings Coverage as State Street’s Q4 EPS Surged 22.3%; Outshined Forecasts

Upcoming AWS Coverage on T. Rowe Price Group Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 2, 2017 / Active Wall St. announces its post-earnings coverage on State Street Corp. (NYSE: STT). The Company released its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year 2016 (FY16) on January 25, 2017. The Boston, Massachusetts-based Company’s non-GAAP diluted EPS grew 22.3% y-o-y; outperforming market consensus forecasts. Register with us now for your free membership at:

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One of State Street’s competitors within the Asset Management space, T. Rowe Price Group, Inc. (NASDAQ: TROW), reported its Q4 2016 results on January 26, 2017. AWS will be initiating a research report on T. Rowe Price Group in the coming days.

Today, AWS is promoting its earnings coverage on STT; touching on TROW. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=STT

http://www.activewallst.com/registration-3/?symbol=TROW

Earnings Reviewed

During Q4 FY16, State Street’s GAAP total revenue was $2.53 billion compared to $2.54 billion in Q4 FY15. However, the Company’s non-GAAP total revenue for Q4 FY16 rose to $2.75 billion from $2.59 billion in the prior year’s same quarter. The non-GAAP total revenues for the reported quarter fell short of market consensus estimates of $2.77 billion. Non-GAAP total fee revenue rose 6.0% during Q4 FY16 to $2.20 billion. Meanwhile, the Company’s non-GAAP net interest revenue grew 6.6% to $547 million in Q4 FY16.

The holding Company for State Street Bank reported GAAP net income available to common shareholders of $557 million, or $1.43 per diluted share, in Q4 FY16 compared to $547 million, or $1.34 per diluted share, in Q4 FY15. Furthermore, non-GAAP net income available to common shareholders came in at $577 million, or $1.48 per diluted share, for the reported quarter versus $494 million, or $1.21 per diluted share, in Q4 FY15. Wall Street had expected the Company to report non-GAAP net income available to common shareholders of $1.34 per diluted share.

In full year FY16, State Street’s GAAP total revenues fell 2% to $8.12 billion from $8.28 billion in FY15. However, the Company’s non-GAAP total revenue grew 1.2% during FY16 to $10.75 billion from $10.63 billion in FY15. The Company’s GAAP net income available to common shareholders rose during FY16 to $1.97 billion, or $4.97 per diluted share, from $1.85 billion, or $4.47 per diluted share, in the previous year. Additionally, non-GAAP available to common shareholders for FY16 came in at $2.09 billion, or $5.27 per diluted share, compared to $2.02 billion, or $4.89 per diluted share, in FY15.

Earnings Metrics

During the reported quarter, GAAP return on average common equity was 12.1% which were 50 basis points above 11.6% reported in the year ago same period. The non-GAAP return on average common equity for Q4 FY16 stood at 12.5% compared to 10.5% in Q4 FY15. Moreover, the tangible common equity ratio came in at 6.4% in Q4 FY16 compared to 6.8% in Q4 FY15.

Net interest margin, fully taxable-equivalent basis improved three basis points in the reported quarter to 1.09% from 1.06% in Q4 FY15. While, net interest margin, operating-basis stood at 1.08% in Q4 FY16 compared to 1.01% in Q4 FY15. As on December 31, 2016, the Company’s Common equity Tier 1 ratio under Basel III advanced approaches was 11.7% compared to 12.5% as on December 31, 2015. Furthermore, Tier 1 leverage ratio under Basel III advanced approaches stood at 6.5% as on December 31, 2016, versus 6.9% as on December 31, 2015.

Balance Sheet Analyzed

State Street’s total assets under custody and administration were $28.77 trillion at December 31, 2016, compared to $27.51 trillion at close of Q4 FY15. The Company had asset under management amounting to $2.47 trillion as on December 31, 2016, compared to $2.25 trillion at the end on Q4 FY15.

Average interest earning assets grew to $202.19 billion in Q4 FY16 from $200.90 billion in the previous year’s quarter. Total deposits were $187.16 billion as on December 31, 2016, compared to $191.63 billion recorded as on December 31, 2015. Furthermore, the Company reported long-term debt of $11.43 billion as on December 31, 2015, versus $11.50 billion as on December 31, 2015.

Share Repurchase

In Q4 FY16, the Company repurchased approximately $325 million of its common stock at an average price of $76.70 per share.

Stock Performance

At the closing bell, on Wednesday, February 01, 2017, the stock closed the trading session at $76.34, marginally up 0.18% from its previous closing price of $76.20. A total volume of 2.52 million shares have exchanged hands, which was higher than the 3-month average volume of 2.29 million shares. State Street’s stock price rallied 9.26% in the last three months, 18.06% in the past six months, and 47.44% in the previous twelve months. The stock is trading at a PE ratio of 15.34 and has a dividend yield of 1.99%.

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