The Bank of New York Mellon Up 8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for The Bank of New York Mellon Corporation (NYSE: BK). Shares have added about 8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is The Bank of New York Mellon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
BNY Mellon Q1 Earnings Beat on Higher Fee Income & AUM
BNY Mellon’s first-quarter 2024 adjusted earnings of $1.29 per share surpassed the Zacks Consensus Estimate of $1.19. Also, the bottom line reflects a rise of 14% from the prior-year quarter.
Results have been primarily aided by a rise in fee revenues, particularly investment services fees. The assets under custody and/or administration (AUC/A) and assets under management (XISX:AUM) balance grew on solid market rally. However, higher expenses and a decline in net interest revenues (NIR) hurt the results. Also, the credit quality was weak in the reported quarter.
Net income applicable to common shareholders (GAAP basis) was $953 million or $1.25 per share, up from $911 million or $1.13 per share recorded in the year-ago quarter. We had projected net income applicable to common shareholders to be $682.8 million.
Revenues & Expenses Rise
Total revenues increased 3% year over year to $4.53 billion. The top line surpassed the Zacks Consensus Estimate of $4.38 billion.
NIR, on a fully taxable-equivalent basis, was $1.04 billion, down 8% year over year. The decline reflected changes in balance sheet size and mix, partly offset by higher interest rates. Our estimate for the metric was $1.01 billion.
The net interest margin (FTE …
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