Earnings Overview
State Street Corporation (NYSE:STT) posted third‑quarter adjusted earnings per share of $3.69, narrowly beating the analyst consensus of $3.67. Revenue for the quarter was $4.0 billion, missing the consensus estimate of $4.04 billion, and the stock fell 4.65% in pre‑market trading.
Revenue Breakdown
Total revenue increased 13% year‑over‑year to $4.0 billion, driven by an 11% rise in fee revenue to $3.1 billion and a 21% jump in net interest income to $864 million. Revenue was down 1% from the prior quarter but up from $3.5 billion in the same quarter last year.
Fee and Interest Income Guidance
The company raised its full‑year 2026 fee‑revenue outlook to an increase of approximately 13%‑14% YoY, up from the prior guidance of 12%‑13% YoY (mid‑point now 13.5%). Net interest income guidance was also increased to an expected rise of approximately 15%‑16% YoY, versus the earlier 14%‑15% YoY range.
Record Service and Management Fees
Servicing fees reached a record $1.5 billion, up 10% YoY, while management fees hit a record $797 million, up 20% YoY. New servicing‑fee revenue wins contributed $68 million during the quarter.
Assets Under Custody and Administration (AUCA)
Assets under custody and administration climbed to a record $59.2 trillion at quarter‑end.
Expenses and Operating Leverage
Total expenses rose 8% YoY to $2.6 billion but fell 1% from the prior quarter, delivering operating leverage of 531 basis points. The company updated its full‑year 2026 expense outlook to an increase of approximately 8%‑8.5% YoY, up from the previous guidance of about 8% YoY.
Profitability and Shareholder Returns
Pre‑tax margin expanded to 34.6%, up from 31.1% in the year‑ago quarter. State Street returned $651 million to shareholders through dividends and share repurchases during the quarter.
Market Reaction
Following the earnings release, State Street shares declined 4.65% in pre‑market trading.