- State Street (STT +0.1%) beat expectations for Q2 earnings and revenues, but warns that it would be challenging for it to increase revenue faster than expenses this year.
- CEO Joseph Hooley now sees STT's Q3 operating expenses ~$20M higher than in Q2 and expenses in Q4 roughly unchanged from Q3; in Q2, operating expenses rose 3.7% Y/Y to $1.82B but fell 5.2% Q/Q.
- STT also now expects 2014 regulatory costs to be higher than previously expected, after forecasting a range of $30M-$40M.
- Analysts also note that Q2 results benefited from a much lower tax rate, which added ~$0.09/share to profit.
- Q2 net interest margin narrowed sharply to 1.12% from 1.31% a year earlier and 1.24% in Q1.