Bank of New York Mellon reported its first-quarter 2011 results on Tuesday, including a 4% jump in net income to $625 million, or $0.50 per share, compared to $601 million, or $0.49 per share, a year ago. These EPS results fell short of analysts’ estimates by $0.07.
On a sequential basis, net income dropped 9% from $690 million, or $0.55 per share, in the fourth quarter of 2010.
Revenue for the first quarter also missed analysts’ estimates, coming in at $3.60 billion on a non-GAAP basis and $3.65 billion on a GAAP basis. Analysts had expected total revenues of $3.67 billion. Total sales were up about 9% vs. last year, but were down 3% from the fourth quarter of 2010.
“Over the past year, unlike many, we continued to grow revenue and earnings despite the challenging environment, and did so with a clean balance sheet. Sequentially, revenue was lower due to seasonality, as were expenses despite higher litigation costs,” said Chairman and CEO Robert P. Kelly in a press release.
“A fundamental strength of our business model is the ability to rapidly grow capital and generate a high return on it,” he explained. “Specifically, in the first quarter of 2011, our capital grew at an annualized rate of 28 percent, and we generated a 21% return on it.”
Assets under custody and administration were $25.5 trillion at March 31, 2011, an increase of 14% compared with the prior year and 2% sequentially, according to the company.
Assets under management, excluding securities lending assets, amounted to $1.2 trillion, a jump of 11% vs. the prior year and 5% over the prior quarter.
Investment-services fees totaled $1.7 billion, an increase of 27% year-over-year and a decrease of 2% sequentially. The year-over-year results reflect acquisitions, new business and higher market values.