State Street Q3 EPS beats but revenue and fees miss, cash outflows offset ETF inflows, shares tumble 8%
What happened
State Street reported Q3 2026 results Wednesday morning: adjusted EPS of $3.69, a penny above the $3.68 consensus, but revenue of $4.00 billion missed the $4.03-4.04 billion expected. Fee revenue of $3.14 billion came in below the roughly $3.16 billion expected, with servicing fees of $1.492 billion vs $1.505 billion expected, and the bank raised the upper end of its expense-growth guidance. Net interest income of $864 million beat the $853 million projection, and assets under management of $6.31 trillion (up 15.8% year over year) beat expectations, with assets under custody and administration up 15% to $59.2 trillion. The flow picture drove the selloff: State Street ETFs led by the SPDR S&P 500 ETF (SPY) drew $68 billion in net inflows, but $62 billion of cash withdrawals offset nearly all of it, leaving total net flows of just $7 billion versus $26 billion a year ago and $114 billion last quarter. Shares fell about 8-9% in premarket trading.
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Who’s affected
- State Street (STT) — Q3 EPS beat by a penny but revenue and fee revenue missed, expense guidance raised, net flows collapsed; shares down ~8-9% premarket to a multimonth low near the 200-day moving average
- Custody and asset-manager peers (e.g. Bank of New York Mellon (BK), BlackRock (BLK), Schwab (SCHW)) — read-through on fee pressure, deposit/cash outflows, and flow trends in a higher-rate environment
- Financials broadly — caps a split big-bank earnings week and keeps focus on whether higher yields and rising expenses are biting custody and servicing economics