Northern Trust misses analyst estimates in Q4

Profit and revenue rise less than expected

Northern Trust Bank's downtown Milwaukee office.

Chicago-based Northern Trust Corp. today reported earnings results that missed analyst estimates.

Northern Trust Bank's downtown Milwaukee office.
Northern Trust Bank’s downtown Milwaukee office.

Northern Trust Corp. has a Northern Trust Bank office on Wisconsin Avenue in downtown Milwaukee. The company has $6.7 trillion in assets under custody and about 40 global offices.

The Seeking Alpha consensus analyst prediction was Northern Trust would turn out $1.13 per share in the fourth quarter, but it fell short with net income of $266.5 million, or $1.11 per diluted share. The results were a major improvement over the fourth quarter of 2015, though, when net income was $239.3 million, or 99 cents per share.

The financials sector has risen more than 17 percent in the S&P 500 since the election. But Northern Trust fell about 5 percent, to $83.54, in early trading today.

The banking company’s revenue was $1.25 billion in the fourth quarter, up from $1.16 billion in 2015. That was about $20 million below analysts’ revenue predictions.

Net interest income was $329.3 million, up 11 percent from the fourth quarter of 2015. Noninterest income was $917.1 million, up 6 percent year-over-year.

For the full year, Northern Trust reported net income of $1 billion, or $4.32 per diluted share, up 6 percent, from $973.8 million, or $3.99 per share, in 2015.

Frederick Waddell, chairman and chief executive officer, pointed out expenses were up 6 percent because Northern Trust is investing in employees, technology and keeping up with regulations.

“Our fourth quarter revenue was up 7 percent versus one year ago, reflecting solid growth in net interest income, foreign exchange trading income, and trust, investment and other servicing fees,” Waddell said. “Assets under custody and under management ended the quarter up 11 percent and 8 percent, respectively, compared to a year ago, primarily driven by higher markets and our continued success in winning new business.”

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Molly Dill, former BizTimes Milwaukee managing editor.

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