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    10. State Street Corp.

    By Lynnley Browning, Globe Staff, 05/18/99

    ew companies have ridden the modern investing and technology revolutions like State Street.

    Born in 1792 as a bank, the Boston-based company recently completed a transformation begun two decades ago, casting off its remaining banking operations to focus exclusively on its core businesses - high-tech record-keeping and asset custody for the global investment industry, and fast-paced money management.

    State Street sold its modest commercial banking and retail deposit operations to Citizens Financial Group Inc. earlier this month, a transaction that marked the giant's exit from old-world banking.

    The company, which has $5 trillion in assets in custody and is the nation's third-largest money manager with $525 billion in assets, has been one long, happy story for investors.

    With double-digit earnings and revenue growth for 21 straight years, State Street has treated shareholders to compound share growth of 34 percent a year for two decades, delighting Wall Street observers.

    Some industry analysts even view the company as a tech play that has profits as well as revenues, instead of just the latter, as is the case with many Internet firms. Last year State Street earned $435.9 million, a rise of 15 percent, on revenue of $2.8 billion.

    But lately, a few analysts have wondered how long the stellar share growth can last. Such questioning by PaineWebber analyst Ruchi Madan earlier this month sent State Street stock down nearly 7 percent in one day, barely a week after the shares hit a 52-week high.

    While the company has said earnings growth will probably eventually slow down, it is still projecting strong numbers. Chief executive Marshall Carter recently extended his revenue growth goal of 12.5 percent a year to cover a 10-year period through 2010, according to State Street spokeswoman Alison Riley. That would represent a tripling in revenue by the end of the next decade.

    This story ran on page D12 of the Boston Globe on 05/18/99.
    © Copyright 1999 Globe Newspaper Company.

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