Earnings Preview: The Bank of New York Mellon Corporation (NYSE:BK)
By:NewsyStocks   Tuesday, January 17, 2022 1:33 PM



In the last four quarters ended Sep 2011, the company's reported quarterly EPS exceeded analysts' consensus estimates on two occasions, met on one occasion, and missed on one occasion. Of the 4 analysts making forecasts, 2 raised and 2 lowered their forecast for the fiscal quarter ending December 2011.

I think, for the fourth quarter of 2011 (December 2011), the company is likely to report revenues of $3.76 billion, an increase of 0.7 percent over the same quarter a year ago. Non-U.S. revenue is likely to hit a new record at 40 percent of the total revenue. Net interest revenue is likely to be up 9 percent, largely reflecting the growth in client deposits, as well as growth in the securities portfolio.
Noninterest expense should have increased 7 percent that was due to higher litigation expenses, increased variable expenses in support of revenue growth. Overall, increasing revenue, combined with a lower expense growth rate, resulted in 205 basis points of operating leverage. Net on net, the company is likely to report EPS of $0.53, compared to $0.59 in the same quarter in the previous fiscal year.
In November, the bank agreed to buy Penson Worldwide's Australian clearing-services unit for $33 million. The deal, which will be an affiliate of Mellon's Pershing Australia business, will expand the
company's footprint in the land down-under.

Last month, BNY Mellon announced that it agreed to pay $1.3 million to settle an auction-rate securities case that was being investigated by authorities in Texas, New York, and Florida. Few days back, the bank announced that it has completed the previously announced sale of its shareowner services business to Computershare. The transaction resulted in a modest after-tax loss due to the impact of non-deductible goodwill associated with the business, which will be reflected in BNY Mellon's results for the fourth quarter of 2011. The transaction enhances BNY Mellon's capital ratios, generating over $200 million in additional capital and adding around 20 basis points to BNY Mellon's Basel III Tier 1 common equity ratio.

 

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