Core Viewpoint - State Street (STT) is expected to report fourth-quarter and 2025 results on January 16, with anticipated year-over-year growth in revenues and earnings [1][9]. Financial Performance Expectations - The Zacks Consensus Estimate for fourth-quarter earnings is $2.82 per share, reflecting an 8.5% increase from the previous year [2]. - Quarterly sales are estimated at $3.59 billion, indicating a 5.3% year-over-year growth, while full-year sales are projected at $13.88 billion, representing a 6.1% increase [3]. Key Developments - In November, State Street entered a strategic partnership with Albilad Capital to enhance securities services in Saudi Arabia [4]. - The company acquired PriceStats, a provider of global inflation data, and also acquired global custody businesses from Mizuho Financial Group [5][6]. Earnings Drivers - Net Interest Income (NII) is expected to rise to $770 million, a 2.8% year-over-year increase, despite recent interest rate cuts [10][11]. - Fee revenues are projected to grow by 6.8% year-over-year, with FX trading services income estimated at $393 million, a 9.2% increase [12][14]. Expense Management - Total expenses are anticipated to rise due to increased information systems costs and strategic investments, with adjusted expenses expected to grow by 4.5% in 2025 [16][17]. Earnings Surprise History - State Street has a strong earnings surprise history, with an average surprise of 6% over the last four quarters [2][18].

Core Insights - State Street (STT) is expected to report third-quarter 2025 results on October 17, with anticipated year-over-year growth in revenues and earnings [1] Financial Performance - In Q2, STT's earnings exceeded the Zacks Consensus Estimate, driven by increased fee revenues and improvements in total assets under custody and administration (AUC/A) and assets under management (AUM) [2] - The Zacks Consensus Estimate for Q3 earnings is $2.61 per share, reflecting a 15.5% increase from the previous year, while sales are projected at $3.46 billion, indicating a 3.7% year-over-year rise [3] Key Factors Influencing Q3 Earnings - Net Interest Income (NII) is expected to benefit from stabilized funding costs and higher rates, with the consensus estimate for NII at $739.6 million, a 2.2% increase [4][6] - Fee revenues are projected to rise due to increased foreign exchange trading volumes, with FX trading services income estimated at $386.8 million, a 3.4% year-over-year increase [7] - Management fees are expected to increase by 12.1% to $590.7 million, supported by market appreciation and inflows [8] - Servicing fees are projected to improve by 5.5% to $1.34 billion, driven by a healthy conversion rate from a backlog of servicing wins [9] - Total fee revenues are estimated to grow by 4.1% to $2.72 billion [12] Expense Outlook - Total adjusted non-interest expenses are anticipated to rise by 5.4% year-over-year to $2.43 billion, influenced by higher information systems costs and strategic investments [13] Earnings Prediction - The likelihood of STT beating the Zacks Consensus Estimate is high, supported by a positive Earnings ESP of +0.45% and a Zacks Rank 1 (Strong Buy) [14][15]