State Street release first quarter 2012 earnings report

Common share earnings have risen since last quarter but still lag behind results from the same time last year, according to State Street Corpration's first quarter 2012 earnings report.

Earnings per common share were $0.85, down 9 per cent from $0.93 in the first quarter of 2011 and up 12 per cent from $0.76 in the fourth quarter of 2011.

Revenue increased in comparison to last quarter by 5 per cent, from $2.32 billion to $2.42 billion, and increased 3 per cent from the first quarter of 2011.

State Street reported expenses have risen, increasing eight per cent from $1.7 billion in the first quarter of 2011 to $1.84 billion this quarter, and up 12 per cent from the $1.78 billion recorded in the final quarter of 2011.

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Return on average common shareholders' equity was 8.8 per cent in the first quarter of 2012, compared to 10.5 per cent in the first quarter of 2011 and 7.8 per cent in the fourth quarter of 2011, according to the release.

"We continue to prioritise a return of capital to our shareholders … our Board of Directors increased our quarterly dividend to $0.24 per common share in March for payment in April ... in addition, the Board of Directors approved a new common stock purchase program authorising the purchase of up to $1.8 billion of our common stock through 31 March 2013," he said.

State Street costs included $21 million of pre-tax acquisition and restructuring costs and $15 million for litigation-related settlements during the first quarter 2012.

Of the $21 million, $13 million was for acquisition costs and $15 million is tied to their business operations and information technology transformation program.

"We are pleased with the ongoing success of our business operations and information technology transformation program, from which we continue to expect to achieve approximately $94 million in annual pre-tax, run-rate expense savings in 2012. 

"We remain committed to managing expenses carefully and continue to expect our compensation-to-revenue ratio to decline in 2012, compared to 2011, assuming a modest increase in operating-basis revenue," State Street chairman, Joseph L. Hooley said.