On Wednesday, State Street Corporation (NYSE:STT) reported third-quarter adjusted earnings per share of $3.69, narrowly exceeding the analyst consensus of $3.67, but revenue of $4.0 billion fell short of the $4.04 billion estimate.
The company’s stock declined 7.52% in pre-market trading following the results.
Total revenue increased 13% year-over-year (YoY), driven by an 11% rise in fee revenue to $3.1 billion and a 21% jump in net interest income to $864 million. However, revenue was down 1% from the prior quarter. Compared to the same quarter last year, revenue grew from $3.5 billion.
The company raised its full-year 2026 fee revenue outlook to up approximately 13%-14% YoY, compared to its previous guidance of up approximately 12%-13% YoY. The midpoint of 13.5% aligns with the updated range. State Street also increased its net interest income guidance to up approximately 15%-16% YoY from up approximately 14%-15% YoY previously.
Servicing fees reached a record $1.5 billion, up 10% YoY, while management fees hit a record $797 million, up 20% YoY. Assets under custody and administration climbed to a record $59.2 trillion at quarter-end, with new servicing fee revenue wins of $68 million.
Total expenses of $2.6 billion rose 8% YoY but decreased 1% from the prior quarter, resulting in operating leverage of 531 basis points. The company’s 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.
The company updated its full-year 2026 expense outlook to up approximately 8%-8.5% YoY from up approximately 8% previously.