Tags: US | State | Street | Outlook

State Street Predicts Profit Will Top Estimates

Wednesday, 07 Jul 2010 09:23 AM

 

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State Street Corp. said Wednesday that it expects to report a profit of 87 cents per share for the second quarter, which would easily top analysts' expectations.

Shares of State Street jumped in premarket trading on the news. They rose $2.72, or 8.2 percent, to $36.06 ahead of the opening bell.

Analysts polled by Thomson Reuters had forecast the bank would earn 72 cents per share during the April-June quarter.

The custody bank based in Boston reported the preliminary results early as it disclosed its second-quarter profit would include a one-time, after-tax charge of $251 million, or 50 cents per share, to help support trust funds it manages. The contribution to the funds allows State Street Global Advisors, which manages the funds, to lift redemption restrictions on the funds beginning in August.

Restrictions on redemptions were put in place in 2008 at the peak of the credit crisis.

State Street also said it would record a one-time tax benefit of $180 million, or 36 cents per share, during the second quarter because of restructuring non-U.S. assets.

Analysts estimates do not typically include special one-time charges and gains.

State Street said its operating profit would be 93 cents per share for the quarter. That excludes the special charge and tax gain. However, it includes gains on investment securities, provisions for credit losses, taxes on bonuses paid to British workers and merger and integration costs.

The bank expects total revenue for the quarter was $2.3 billion overall and $2.2 billion on an operating basis. Analysts had forecast revenue of $2.21 billion.

The bank plans to release its full second-quarter results on July 20.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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