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Northern Trust stock falls on weak Q3 results

Northern Trust Corporation (NTRS) reported a 26% jump in earnings for the third quarter helped by higher net interest income, a rise in foreign exchange trading income, and an increase in trust, investment and other servicing fees. However, the stock fell over 3% in the premarket as the results missed consensus estimates.

Net income jumped 26% to $374.5 million, or $1.58 per share as total revenue improved 9% to $1.48 billion.

Northern Trust third quarter 2018 Earnings Infographic
Northern Trust Corporation Q3 2018 Earnings Infographic

Trust, investment and other service fees rose 8% helped by a revenue associated with acquisition and integration of UBS Asset Management’s fund administration unit in Luxembourg and Switzerland. Favorable markets and higher loan volumes too drove the fees higher.

Net interest income grew 14% on higher short-term interest rates and lower premium amortization. Assets under custody/administration increased 12% to $10.83 trillion and asset under management rose 4% to $1.17 trillion.

Provision for credit losses fell by 19% on reductions in outstanding loans and undrawn loan commitments attributable to the commercial and institutional and residential real estate portfolios.

Total stockholders equity rose 2% to $10.3 billion helped by earnings. During the quarter, the company repurchased 2.17 million shares of common stock at a total cost of $235.9 million and 6.48 million shares of common stock at a total cost of $689.7 million.

Shares of Northern Trust ended Tuesday’s regular session up 1.23% at $99.38 on the Nasdaq. The stock has risen over 8% in the past year.

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