Shares of State Street fell 10%, on pace for its largest one-day percent decline since March 16, 2020, after the investment-management company’s net interest income for the second quarter came in below analysts’ expectations.
State Street stock traded 9.9% lower at $69.80 in midday trading. Over the past 12 months, shares are up almost 17%.
The Boston-based company reported a quarterly profit of $763 million, or $2.17 a share, up from $747 million, or $1.91 a share, a year earlier. Analysts were expecting a profit of $2.10 a share, according to FactSet.
State Street reported revenue of $3.11 billion, up 5% from a year ago but below the $3.14 billion that analysts surveyed by FactSet were expecting. Net interest income rose 18% to $691 million from a year ago, but fell 10% from the first quarter and missed the $717 million that analysts were expecting, according to FactSet.
Chief Executive Ronald O’Hanley told analysts on a conference call that the company’s results “were below our potential.” He said the company expects net interest income to continue to decline on a sequential basis over the next two quarters, and that State Street needs to grow its fee revenue more to offset those declines.
The company also is focused on controlling costs, and plans to “utilize additional tactical expense levers at our disposal,” he said.