BOSTON--(BUSINESS WIRE)--March 20, 2003--State Street Corporation
(NYSE: STT) announced today that it expects reported earnings per
share to be approximately $0.27-$0.29 in the first quarter of 2003.
Reported results in 2003 will include State Street's operating results
of $0.45-$0.47; results from the first two months of the acquired
Deutsche Bank GSS business, including related financing costs ($0.03);
previously announced one-time charges associated with that acquisition
($0.07); and the previously announced one-time charge resulting from
recently enacted Massachusetts REIT tax legislation ($0.08). Excluding
the results of the corporate trust business, which was sold in 2002,
State Street's anticipated first-quarter operating earnings per share
will represent a decline of 10%-13% versus the first quarter of 2002.
Revenue generation was lower than State Street's expectations and
expenses increased from the levels of the fourth quarter. State Street
attributes its lowered revenue projections primarily to a compression
of interest rate spreads, which have had a negative effect on both net
interest and securities lending revenues. Also contributing to the
revenue shortfall were a decline in equity market valuations and a
larger-than-expected slowdown in cross-border investing.
Commenting on the announcement, David A. Spina, chairman and chief
executive officer of State Street, said, "To address this adverse
environment, we are systematically reducing spending during the second
quarter to reflect the lower level of revenue. We are planning to
implement operational efficiencies that involve system consolidations
as well as staff reductions and delays in hiring. Meanwhile, we are
maintaining spending required to support our clients' needs and are
continuing to invest in business initiatives that are essential to our
strategy for long-term growth. We are strengthening our presence in
Europe, expanding our investment servicing capabilities to meet the
needs of hedge funds and wealth managers, and extending our
considerable trading franchise to include equities."
Spina continued, "Our integration of Deutsche Bank's Global
Securities Services business is on track. We will provide an update on
our progress in April. Client conversions commenced immediately after
the January 31 close of the acquisition, and our planned cost
reductions are on schedule with the global integration blueprint we
put into effect last month."
Spina concluded, "Although first-quarter results will be below our
expectations, we remain confident about our long-term strategy and
outlook. Our unique focus on meeting the needs of sophisticated global
investors, our leadership in this growing market and our solid
financial position will enable us to remain relatively strong over the
short term and to grow vigorously in the future."
State Street Corporation will host a web-cast of its first-quarter
earnings conference call on Tuesday, April 15, 2003, at 9:30 a.m. EDT,
following the release of the company's quarterly financial results.
The call will be accessible on State Street's investor relations home
page, at www.statestreet.com/stockholder, and by telephone at +1
719/457-2625. Recorded replays of the earnings conference call will be
available on the web site, and by telephone (+1 402/220-4230),
beginning at 2:00 p.m. that day.
State Street Corporation (NYSE: STT) is the world's leading
specialist in providing sophisticated global investors with investment
servicing and investment management. With $6.2 trillion in assets
under custody and $763 billion in assets under management (as of
December 31, 2002), State Street is headquartered in Boston,
Massachusetts and operates in 21 countries and over 100 markets
worldwide. For more information, visit State Street's web site at
www.statestreet.com or call 877/639-7788 (NEWS STT) toll-free in the
United States and Canada, or +1 202/266-3340 outside those countries.
This news announcement contains forward-looking statements as
defined by United States securities laws, including statements about
the financial outlook. Those statements are based on current
expectations and involve a number of risks and uncertainties,
including those related to the pace at which State Street adds new
clients or at which existing clients use additional services, the
value of global and regional financial markets, the pace of
cross-border investment activity, changes in interest rates, the pace
of worldwide economic growth and rates of inflation, the extent of
volatility in currency markets, consolidations among clients and
competitors, State Street's business mix, the dynamics of markets
State Street serves, and State Street's success at integrating and
converting acquisitions into its business. Other important factors
that could cause actual results to differ materially from those
indicated by any forward-looking statements are set forth in State
Street's 2002 Annual Report and Form 10-K and subsequent SEC filings.
State Street encourages investors to read the Corporation's Annual
Report and Form 10-K, particularly the section on factors that may
affect financial results, and its subsequent SEC filings for
additional information with respect to any forward-looking statements
and prior to making any investment decision. The forward-looking
statements contained in this press release speak only as of the date
hereof, March 20, 2003, and the company will not undertake efforts to
revise those forward-looking statements to reflect events after this
date.
CONTACT: State Street CorporationEdward Resch, 617/664-1110
or
Investors:
Kelley MacDonald, 617/664-3477
or
Media:
Hannah Grove, 617/664-3377
SOURCE: State Street Corporation