July 17 (Bloomberg) -- Northern Trust Corp., the third-biggest independent U.S. custody bank, fell the most in three months after reporting second-quarter earnings that missed analysts’ estimates.
Northern Trust, which is based in Chicago, declined 2.2 percent, the most since April 15, after reporting a 6.2 percent increase in net income to $187.9 million, or 78 cents a share. Results missed the 83-cent average estimate of 15 analysts surveyed by Bloomberg.
Higher-than-anticipated expenses, including compensation, “lowered earnings per share by about 4 cents compared to the market expectation,” Marty Mosby, an analyst at Guggenheim Securities LLC in Memphis, Tennessee, said in an e-mailed statement.
Northern Trust, led by Chairman and Chief Executive Officer Frederick H. Waddell, has trailed larger rivals Bank of New York Mellon Corp. and State Street Corp. in cutting jobs amid record-low interest rates, announcing measures last year aimed at lifting annual pretax income by $250 million by the end of this year. The industry has suffered as the Federal Reserve kept its benchmark lending rate near zero since December 2008, eroding earnings from investments and securities lending.
Northern Trust fell $1.34 to close at $59.41 in New York trading. The company had risen 21 percent this year through yesterday, compared with the 27 percent gain by the Standard & Poor’s 20-member index of asset managers and custody banks.
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