State Street Corp.'s first-quarter earnings rose 4%, helped by an increase in new customers, beating analysts' expectations of lower earnings due to high costs, volatile markets and climbing interest rates.
In the second quarter, State Street expects to recognize a pretax charge in the range of $23 million to $25 million as it trims its real estate portfolio and expects to sublease space in its headquarters building in Boston's financial district.
The company, the financial industry's biggest recordkeeper, said first-quarter net income jumped to $226 million, or 67 cents a share. It now has $1.4 trillion in assets under management, making it the world's biggest institutional money manager.
State Street Chairman and CEO Ron Logue, who came on board last summer, has undertaken cost-cutting measures to improve the company's bottom line. "We continue to see significant increases in fee revenue, both on a year-over-year and on a consecutive quarter basis," Logue said.
"They are gaining traction on their new wins, but pulling in new customers and selling them more products," said Gerard Cassidy, an analyst with RBC Capital Markets.