NTRS 4Q EPS And Operating EPS Well Below J.P. Morgan Estimate

Northern Trust (NASDAQ: NTRS) reported 4Q EPS of $0.64 and operating EPS of $0.59, “well below our estimate of $0.71 due to a sharp decline in net interest margin (NIM), very sharp growth in expenses, and weakness in assets under management,” J.P. Morgan reports.

“This was partly tempered by growth in F/X trading revenues, albeit lagging peers. Results benefited from below normal tax rate, net of another securities impairment loss,” J.P. Morgan writes. “NTRS is extending the duration of its securities portfolio to limit further NIM decline.

“The recent Illinois corporate tax rate hike should be manageable especially from 2012 onwards. According to NTRS, C&IS new business wins set a record in 4Q and across all business segments but C&IS fee growth thus far has lagged growth in volumes.”

Northern Trust closed Thursday at $52.91.