Hot Stock to Track After Earnings: Northern Trust Corporation (NASDAQ:NTRS)

Northern Trust Corporation (NASDAQ:NTRS) reported earnings for the three months ended Mar2016 on April 19, 2016. The company earned $1.01 per share on revenue of $1.19B. Analysts had been modeling earning per share of $0.95 with $1.18B in revenue.

Northern Trust Corporation (NTRS) on April 19, 2016 reported first quarter net income per diluted common share of $1.01, compared to $0.94 in the first quarter of 2015 and $0.99 in the fourth quarter of 2015. Net income was $241.8 million, compared to $230.7 million in the prior-year quarter and $239.3 million in the prior quarter. Return on average common equity was 11.4%, compared to 11.3% in the prior-year quarter and 11.1% in the prior quarter.

“Northern Trust performed well in the first quarter of 2016, despite the volatile market environment and heightened global economic uncertainty. Total revenue grew 5%, with strong growth in net interest income and steady growth in trust, investment and other servicing fees, partially offset by lower foreign exchange trading income. Expenses increased 5%, as we continued to invest in people, technology and regulatory initiatives to support our growing business. Our return on equity was 11.4%, within our target range of 10-15%,” said Frederick H. Waddell, Chairman and Chief Executive Officer.

FIRST QUARTER 2016 PERFORMANCE VS. FIRST QUARTER 2015

Net income per diluted common share was $1.01 in the first quarter of 2016, up from $0.94 in the first quarter of 2015. Net income was $241.8 million, compared to $230.7 million in the prior-year quarter.

Revenue of $1.19 billion increased $55.5 million, or 5%, from $1.13 billion in the prior-year quarter, primarily reflecting higher net interest income and trust, investment and other servicing fees, partially offset by lower foreign exchange trading income.

Trust, investment and other servicing fees were $748.2 million, up $20.7 million, or 3%, from $727.5 million in the prior-year quarter, primarily reflecting net new business and lower money market fee waivers, partially offset by the unfavorable impact of equity markets and movements in foreign exchange rates.

Assets under custody/administration (AUC/A) and assets under management are the primary drivers of the Corporation’s trust, investment and other servicing fees. Assets under custody/administration totaled $7.93 trillion at March 31, 2016. The following table presents the Corporation’s assets under custody, a component of AUC/A, and assets under management by reporting segment.

Northern Trust Corporation earnings per share showed an increasing trend of 20.3% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 469%.Analysts project EPS growth over the next 5 years at 12.24%. It has EPS annual growth over the past 5 fiscal years of 7.8% when sales grew 3.8. It reported 5.2% sales growth, and 7.3% EPS growth in the last quarter.

The stock is trading at $74.1, up 37.05% from 52-week low of $54.38. The stock trades down -5% from its peak of $79.25 and 0.19% above the consensus price target of $74.24. Its volume clocked up at 1.41 million shares which is higher than the average volume of 1.3 million shares. Its market capitalization currently stands at $16.94B.