Low Rates To Impact Northern Trust's (NTRS) Q4 Earnings
Zacks Investment Research | Jan 19, 2020 08:17PM ET
Northern Trust Corporation’s (NASDAQ:NTRS) fourth-quarter results, scheduled for Jan 22, are expected to reflect a year-over-year rise in revenues, while earnings might display a decline.
Northern Trust uses a lag effect to calculate its corporate custody and investment management fees, i.e. the computations are based on the prior-quarter end valuations. Since the performance of equity markets was strong in the fourth quarter, the company might have registered growth in custody, servicing and management fees.
Notably, the company provides majority of its asset-management services through the C&IS unit, which generates more than 50% of total revenues. A rise in revenues in this segment is likely to have boosted the company’s overall revenues. Further, the Zacks Consensus Estimate of $1.54 billion for the to-be-reported quarter’s sales reflects a year-over-year rise of 2.6%.
Per the Zacks Consensus Estimate, the C&I segment’s custody and fund administration fees will likely flare up 2% sequentially to $400 million. Furthermore, securities lending revenues are projected to be up 16.4% sequentially. Yet, investment management revenues are likely to have declined on a sequential basis.
Therefore, with steady performance of its components, total C&I trust, investment and other servicing fees are likely to have escalated 1.3% sequentially to $567 million.
Let’s have a look at what our quantitative model predicts:
Northern Trust does not have the right combination of the two key ingredients — a positive Original post
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