State Street profit rises by nearly half

State Street Corp., the big Boston firm that provides financial services to institutional investors, said today that its second-quarter profit rose by nearly half as the company grew both its fee-based and interest revenue streams.

On the New York Stock Exchange, company shares were up $5.73, or just over 10 percent, to $61.43 in mid-afternoon trading.

For the three months ended June 30, the company earned $548 million, or $1.35 per share, compared with $366 million during the same period a year earlier.

The most recent quarter included $22 million of after-tax costs related to State Street's acquisition of Investors Financial Services Corp. Excluding those expenses, the company would have earned $1.40 per share.

Analysts surveyed by Thomson Financial had expected the company to earn $1.36 per share. Those forecasts typically exclude one-time costs.

Revenue totaled $2.67 billion during the quarter, up from $1.92 billion a year earlier. Analysts forecast sales of $2.6 billion.

State Street said revenue from fees jumped to $2.01 billion from $1.54 billion. Servicing fees, which account for about half of all fee revenue, rose 28 percent.

Revenue from interest increased to $657 million from $385 million.

Ronald E. Logue, State Street's chairman and chief executive (pictured at right), said in a statement: “Our strong performance in the second quarter following outstanding performance in the first quarter demonstrates our core business strength and our ability to sustain strong momentum globally. Additionally, the performance of the acquired Investors Financial business continues to meet or exceed the financial targets we established with more than 90 percent of the customer revenue now retained. (AP)