Why Northern Trust Shares Tumbled 5 Percent Tuesday

Before the opening of the rock on Tuesday.Northern Trust (N)orthernTrust(math.) genus(NASDAQ resonance stock code: NTRS)The company released its first quarter earnings report, which set the tone for the stock price where it has been. Unfortunately, this meant a difficult trading session for the company and its investors, as market participants mostly sold off the stock. The stock price fell 5%, down fromStandard & Poor's 500The decline in the index of 0.2% was even more severe.

Double whammy.

Northern Trust's first quarter saw a double dip in revenues and especially net income. The former fell by 6% year-on-year to US$1.65 billion, while the latter declined even more (36%) to just under US$215 million (US$0.96 per share) on a Generally Accepted Accounting Principles (GAAP) basis.

Both of these key figures were significantly below the average analysts' expectations. The analysts' consensus forecast was for revenues of $1.78 billion and earnings per share of $1.45.

During the quarter, the Chicago-based financial services company's non-interest expenses grew by 6%, and other line items that impacted its performance included a pre-tax loss on debt securities of more than $184 million as the company "repositioned" its investment portfolio. On a positive note, the company's Aggregate Asset Management (AUM) grew by 13%, a key metric for many similar companies.

Koon said a thriving stock market would provide support.

Gunn's management is positive about Northern Trust's track record and near-term prospects, but its comments do not appear to be shared by investors given the sell-off. Matron executive officer Michael O'Grady noted that the company has managed to realize deposit growth, and talked about how a strong stock market should help support "the improving momentum across our business."

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Eric Volkman does not own any of the shares listed above.The Motley Fool does not own any of the shares listed above.The Motley Fool has a disclosure policy.

Northern Trust Shares Plunge Tuesday 5%, originally appeared on The Motley Fool.