State Street Results Miss Estimates; Shares Fall as Fees Fall Short of Expectations
State Street Corp.'s quarterly profit missed Wall Street analyst views Friday, and operating expenses climbed, triggering a stock slide.</br></br>Shares sank 4.3% in midday trading as the trust bank reported that compensation and "other expenses" jumped both from a year earlier and the prior quarter. On a call, State Street Chief Financial Officer Michael W. Bell said he expects "some upward pressure on regulatory compliance costs."</br></br>The Boston-based trust bank reported a profit of $545 million, or $1.22 a share, up from $468 million, or $1 a share, a year earlier. After stripping out one-time items, earnings rose to $1.15 from $1.11 a share. But analysts polled by Thomson Reuters had forecast earnings of $1.19 a share.</br></br>Although the bank logged a stronger performance in servicing fees, results in the business were affected by what Chief Executive Joseph L. Hooley said were "pretty negative" fixed-income flows during the course of 2013, which "outstripped positive equity flows" in the second half of the year.</br></br>Servicing fees--easily the largest contributor to revenue--rose 7.1% from a year earlier and 1.7% from the third quarter, to $1.23 billion.