State Street posts higher profit, may take charge
State Street Corp., a Boston company that provides financial services to institutional investors, today reported a 33 percent rise in third-quarter profit, but said it might take a charge if it supports some portfolios managed by its investment unit.
The company, which also earns fees for calculating the bulk of mutual fund prices printed in newspapers, said net income climbed to $477 million, or $1.09 per share, from $358 million, or 91 cents a share, a year earlier.
Excluding charges, earnings rose to $1.24 per share from $1.15.
Wall Street analysts had expected profit of $1.20 a share, according to Reuters Estimates.
Revenue rose 24 percent to $2.77 billion from $2.24 billion. This helped the company forecast that earnings-per-share growth for the full year will be at the high end of a 10 percent to 15 percent range.
The company said it might help some portfolios managed by its State Street Global Advisors unit, which have been under pressure. That could result in a pretax charge of $400 million to $450 million.
Investors have expressed concern about unrealized losses State Street has in its off-balance sheet commercial paper program. Those losses widened to $2.1 billion at the end of the third quarter from $1.6 billion three months earlier.
A Globe story this morning noted that State Street will be the first Boston firm to be partially owned by US taxpayers as part of a federal government plan to invest directly in financial institutionals. To read that story, please click here. (Reuters)