Northern Trust’s Earnings Report: A Mixed Bag

Northern Trust, a stalwart in the financial services industry, has finally released its quarterly earnings estimates. But don’t be fooled by the company’s attempts to spin this as a positive development. The numbers tell a different story.

The company’s stock price has been on a wild ride, fluctuating between $80.81 and $133 over the past 52 weeks. And where is it now? A paltry $125.91. Not exactly a vote of confidence from investors.

But let’s get to the numbers that really matter. The price-to-earnings ratio of 12.29 and the price-to-book ratio of 2.14 are supposed to indicate a moderate valuation. But what they really show is a company that’s struggling to find its footing in a rapidly changing market.

Here are the key takeaways from Northern Trust’s earnings report:

• Revenue growth: 4.2% year-over-year, a far cry from the 10% growth investors were expecting.
• Net income: $434 million, a 2.5% decrease from the same quarter last year.
• Return on equity: 11.3%, a decline from 12.1% in the previous quarter.

It’s time for Northern Trust to take a hard look at its business model and make some serious changes. The company’s lackluster earnings report is a wake-up call that it can’t afford to ignore.