State Street Corporation announced first-quarter earnings per share from continuing operations of $0.84, up 25% from $0.67 in last year’s first quarter driven by strong revenue growth as well as positive operating leverage.
In addition, State Street recognized a $0.03 gain from discontinued operations related to finalizing costs associated with the divestiture of Bel Air Investment Advisors. Record revenue of $1.5 billion in the firstquarter of 2006 is up 16%, or $215 million, compared to $1.3 billionin the year-ago quarter. Total expenses in the first quarter of 2006of $1.1 billion are up 13%, or $130 million, compared to $966 millionin the year-ago quarter. Net income from continuing operations of $282million was up $56 million, or 25% from $226 million a year ago. Forthe first quarter of 2006, return on shareholders’ equity was 17.6%compared to 15.0% in the first quarter of 2005.
Ronald E. Logue, State Street’s chairman and chief executiveofficer, said, “I am very pleased with our overall results. Our feerevenue continues to be strong across all business units andgeographies, especially management fees from State Street GlobalAdvisors. In addition, we benefited from favorable foreign exchangeand equity markets. Our net interest revenue and net interest marginalso increased due to the continuing execution of our balance sheetstrategy.
“Based on the outlook for interest rates, we may face pressurefrom rising rates later this year, and we also need to continue towork hard at moderating our rate of expense growth. Looking to therest of the year, we are well positioned to achieve our previouslystated goals for revenue and earnings per share growth, as well asreturn on equity. If the current strength continues, our results forthe full year may be above the middle of the respective ranges.”