State Street Beats Q4 Expectations But Shares Slip Amid Mixed Guidance

State Street (NYSE:STT) exceeded fourth-quarter earnings expectations, yet its shares dipped more than 3% intra-day today as investors weighed mixed results and guidance. The financial services giant reported strong revenue growth but faced some challenges in maintaining margins.

Adjusted earnings per share came in at $2.60, beating the consensus estimate of $2.36. Quarterly revenue reached $3.41 billion, surpassing projections of $3.29 billion and reflecting a 12% year-over-year increase.

Fee revenue saw a notable 13% rise, totaling $2.66 billion, while net interest income grew by 10% to $749 million. The company also reported $46.6 trillion in assets under custody and administration (AUC/A), marking an 11% increase compared to the prior year.

However, the company’s pre-tax margin for the quarter was 28.1%, slightly below the prior quarter’s 28.4%, though significantly improved from 6.6% a year earlier. The modest margin contraction raised some concerns about the company’s ability to sustain profitability gains amid ongoing efforts to transform its operating model.