State Street (STT Quick QuoteSTT - Free Report) is scheduled to announce third-quarter 2025 results on Oct. 17, before market open. The company’s revenues and earnings are expected to have risen year over year.

In the second quarter, STT’s earnings outpaced the Zacks Consensus Estimate, driven by higher fee revenues and improvements in total assets under custody and administration (AUC/A) and assets under management (AUM) balances. However, a rise in adjusted expenses, a surge in provisions and lower net interest income (NII) were the headwinds.

State Street has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering a surprise of 6.58%, on average.
 

State Street Corporation Price and EPS Surprise

State Street Corporation price-eps-surprise | State Street Corporation Quote

The Zacks Consensus Estimate for State Street’s third-quarter earnings of $2.61 per share has been revised marginally upward over the past seven days. The figure suggests 15.5% growth from the year-ago quarter.

The consensus estimate for sales of $3.46 billion indicates a 3.7% year-over-year increase.

Major Factors to Consider for State Street’s Q3 Earnings

NII: Amid a softening labor market, the Federal Reserve lowered interest rates by 25 basis points to 4.00-4.25% in mid-September. Nonetheless, rates were high for the major part of the third quarter, so State Street’s NII is likely to have gained. Further, funding costs are expected to have stabilized on securities portfolio repricing and a deposit mix shift.

Also, per the Fed’s latest data, the lending scenario was robust in the to-be-reported quarter, leading to an increase in overall loan balances. Hence, stabilizing funding costs, relatively higher rates and modest loan growth are expected to have resulted in an increase in STT’s NII in the quarter.
 
The Zacks Consensus Estimate for average interest-earning assets is pegged at $300.7 billion, which implies an 11.6% rise from the prior-year quarter. Our estimate for the metric is pegged at $298.7 billion.

The consensus estimate for NII (on a fully taxable-equivalent or FTE basis) of $739.6 million indicates a 2.2% rise. We project NII on an FTE basis of $738.5 million.

Fee Revenues: The third quarter witnessed a rise in foreign exchange (FX) trading volumes and volatility, given the global trade tensions and tariff-related uncertainty. This is expected to have boosted State Street’s FX trading services income. The consensus estimate for FX trading services income is pegged at $386.8 million, suggesting a 3.4% year-over-year rise. We expect the metric to be $390 million.

Further, supported by market appreciation and decent inflows, the company’s AUM and AUC/A balances are expected to have increased in the to-be-reported quarter. Thus, management fees are likely to have benefited from this. The consensus estimate for management fees of $590.7 million implies a 12.1% jump. Our estimate for the metric is $569.4 million.

Also, a backlog of servicing wins and a solid pipeline indicate a healthy conversion rate, which is expected to have driven STT’s servicing fees in the third quarter. The Zacks Consensus Estimate for servicing fees of $1.34 billion indicates a 5.5% improvement. We project servicing fees to be $1.31 billion.

The consensus estimate for software and processing fees suggests a 10.6% rise to $230.1 million. Our estimate for the same is $235.6 million. The Zacks Consensus Estimate for securities finance revenues of $119.8 million suggests a 3.3% increase from the year-ago quarter. Our estimate for the same is $121.1 million.

Overall, the Zacks Consensus Estimate for total fee revenues of $2.72 billion indicates a 4.1% year-over-year growth. We project the metric to be $2.7 billion.

Expenses: Higher information systems and communication expenses, and the company’s strategic buyouts and investments in franchises are expected to have led to an overall rise in total expenses in the third quarter.

Despite the company taking measures to improve operating efficiency (which will lead to $500 million in cost savings in 2025), its continued incremental investments in business growth, infrastructure and technology are expected to have resulted in higher costs in the to-be-reported quarter.

We anticipate total adjusted non-interest expenses to rise 5.4% year over year to $2.43 billion.

What the Zacks Model Unveils for State Street

Per our model, the likelihood of State Street beating the Zacks Consensus Estimate this time around is high. This is because the company has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for State Street is +0.45%.

Zacks Rank: The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

State Street’s Peers Worth a Look

Here are a couple of STT’s peer stocks that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this time:

BNY Mellon (BK Quick QuoteBK - Free Report) is slated to report third-quarter 2025 results on Oct. 16. The company has a Zacks Rank #3 at present and an Earnings ESP of +1.07%. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Quarterly earnings estimates for BNY Mellon have been revised marginally lower to $1.75 over the past week.

The Earnings ESP for Northern Trust (NTRS Quick QuoteNTRS - Free Report) is +0.55% and it carries a Zacks Rank #3 at present. The company is slated to report third-quarter 2025 results on Oct. 22.

Over the past seven days, the Zacks Consensus Estimate for Northern Trust’s quarterly earnings has been revised upward to $2.24.