State Street 4Q Net Tumbles 71% On Charges, Sees Flat 09
20 Enero 2009 - 7:25AM
Noticias Dow Jones
DOW JONES NEWSWIRES
State Street Corp.'s (STT) fourth-quarter net income slid 71% on
steps the asset manager took to shore up some funds and
restructuring charges, as flat results are expected for 2009.
That forecast, which compares with 2008's $5.21 and the $4.71
expected for 2009 by analysts surveyed by Thomson Reuters, is below
the company's long-term goal of 10% to 15% growth. Revenue is also
seen being unchanged, compared with State Street's 8% to 12% goal
and the 3% drop projected by analysts.
Shares tumbled 29% premarket to $25.99. The stock has lost half
its value the past four months.
The parent of State Street Global Advisors reported net income
of $65 million, or 15 cents a share, down from $223 million, or 57
cents a share, a year earlier. Operating earnings, which excluding
the fund moves and restructuring charges in the latest quarter,
fell to $1.18 from $1.38.
Revenue rose 7.8% to $2.67 billion as net interest revenue
surged 42% as continued declines in the Fed Funds rate lowered
funding costs. That more than offset weakness in declines of
servicing revenue and management fees.
Analysts were looking for earnings of $1.14 a share on $2.42
billion in revenue.
Unrealized mark-to-market losses at State Street's investment
portfolio more than doubled during the quarter to $6.3 billion,
which State Street blamed on the ongoing market illiquidity. The
figure dropped by $400 million as of Friday.
State Street, which has been trying to cut costs along with
other financial-services companies, last month said it would reduce
its global work force by about 6%, or 1,600 to 1,800 employees,
citing current market conditions. The money manager expects annual
savings of $375 million to $400 million.
As part of the U.S. Treasury's capital purchase program, the
Treasury bought stakes in State Street and is investing $2 billion
in the money manager. State Street, which provides large financial
institutions safekeeping for stocks and assets, was also hired to
serve as a custodian in the government's efforts to revitalize the
markets.
-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310;
shirleen.dorman@dowjones.com
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