Goldman Sachs Comments on State Street's 3Q EPS Beat

Goldman Sachs has published a research report on State Street Corporation

after the company reported 3Q earnings that came in above consensus. In the report, Goldman Sachs writes, "State Street reported adjusted 3Q EPS of $0.96, which included a $22 mn real estate gain. Ex-gain, we peg the firm's core EPS at $0.93, above our and the Street's estimates of $0.89. The upside came from both higher revenues and better-managed expenses. Total revenues of $2.4 bn were 2% better than expected on stronger growth in core servicing business, better FX and securities lending. NII of $564 was up 2% q/q as NIM compression (144 bps in 3Q vs. 161 bps in 2Q) was more than offset by a 10% linked-quarter growth in average earning assets. Total expenses (a big source of concerns last quarter) came in a touch lower than expected at about $1.7 bn, with a comp rate of 40%." Goldman Sachs maintains its CL-Buy rating on State Street, which is currently trading up $2.20 from its $33.87 closing price yesterday.