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Morgan Stanley reported better than expected first quarter earnings before the bell Wednesday. $MS followed the other major banks; Bank of America $BAC JPMorgan Chase $JPM, Wells Fargo $WFC, PNC Financial $PNC Goldman Sachs and Citigroup $C reporting

 Morgan Stanley 

Morgan Stanley NYSE: MS Reported Before Open Wednesday

$1.39 Beat $1.17 AND $10.3B Beat $10.00 Billion Forecast in Revenue

Earnings

Morgan Stanley (NYSE: MS) reported$2.4 billion in first-quarter profit, or $1.39 per share, compared with the $1.17 estimate of analysts surveyed by Refinitiv. Morgan Stanley’s revenues of $10.3 billion beat the $10 billion estimate. Shares closed at $46.69 on Friday and have been between $36.74 and $55.64 in the past year. Morgan Stanley had been impressive with it's market share gains but now analyst will look for more efficiency after last quarters dissappointment.

Analysts have cut estimates for Goldman, Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Morgan Stanley, and Wells Fargo & Co. by an average of 8.1 percent since the last quarter’s earnings reports. Goldman has seen estimates slashed by 27 percent 

Morgan Stanley NYSE: MS

Market Reaction > Pre-market $48.00 +0.98 (2.08%)

Highlights

“We delivered solid earnings despite a slow start to the year following the turbulent markets in the fourth quarter,” CEO James Gorman said in the earnings release. “Even though risks to the global environment remain, markets have recovered and we are well positioned to serve our clients and invest in our businesses.”

  • $1.71 billion in bond trading revenue, $200 million more than analysts had expected, as gains in credit trading helped offset weak government bond and currencies results.
  • Equities trading was $2.02 billion in revenue, just under estimates.
  • Together a 15% decline in trading revenue.
  • Investment banking revenue dropped 24% to $1.15 billion on lower fees from mergers advice and stock and bond underwriting.
  • Morgan Stanley’s wealth management division had $4.39 billion in revenue, exceeding the estimate by $200 million.
  • Had higher interest income through more lending to its wealthy clients.
  • In its smallest division, investment management, Morgan Stanley produced $804 million in revenue, about $115 million more than analysts had expected.

 

Morgan Stanley  Q1 Earnings Recap

$0.91 on $9.35 Billion Forecast in Revenue 

Earnings

Morgan Stanley (NYSE: MS) reported 4Q EPS of 80 cents on revenue of $8.55 billion.missing expected EPS estimate of  91c (range 76c to $1.07) on 4Q net revenue of est. $9.35b (range $8.97b to $10.17b). Estimated 4Q total trading revenue est. $2.82b with equities $2.01b, FICC $822.5m and I-banking rev. est. $1.35. Morgan Stanley had been impressive with it's market share gains but now analyst will look for more efficiency.

Analysts have cut estimates for Goldman, Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Morgan Stanley, and Wells Fargo & Co. by an average of 8.1 percent since the last quarter’s earnings reports. Goldman has seen estimates slashed by 27 percent 

Morgan Stanley NYSE: MS

Market Reaction > Pre-market $41.87 USD −2.62 (-5.89%)

Highlights

  • Fixed income trading revenue sank 30% to $564 million
  • Equity trading revenue was flat at $1.9 billion.
  • Investment banking revenue was flat at $1.4 billion.
  • Wealth management revenue fell 6% to $4.14 billion.
  • Investment management revenue grew 7% to $684 million.
  • In the three-month period, Morgan Stanley recorded an intermittent net discrete tax benefit of $111 million or $0.07 per diluted share, regarding the resolution of multi-jurisdiction tax examinations. While in the same period a year ago, an intermittent net discrete tax provision of $1.0 billion or a loss of $0.58 per diluted share affected the results due to the Tax Cuts and Jobs Act.
  • Compensation expense was $3.8 billion for the quarter, down from $4.3 billion a year ago on lower net revenues.
  • Non-compensation expenses were $2.9 billion, up from $2.8 billion a year ago.
  • The annualized return on average common equity was 7.7% and the annualized return on average tangible common equity was 8.8% in the current quarter.

MS Q4 2018 earnings

Morgan Stanley attributed the weak trading results to market volatility and the drop in wealth management, which had been a strong segment, to a "difficult environment, seasonality and certain compensation-related items."

"In 2018 we achieved record revenues and earnings, and growth across each of our business segments – despite a challenging fourth quarter," said Chairman and CEO James Gorman.

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