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Morgan Stanley reported better than expected second quarter earnings before the bell Thursday as rising markets helped the wealth and investment management business. $MS followed 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 Thursday

 $1.23 Beat $1.14 AND $10.24B Beat $10.03 Billion Forecast in Revenue

Earnings

Morgan Stanley reported second-quarter earnings of $2.2 billion, or $1.23 a share, exceeding the $1.14 estimate of analysts surveyed by Refinitiv. Revenue of $10.24 billion exceeded the consensus estimate by almost $220 million on better-than-expected results in the firm’s wealth management and investment management divisions.

Rising markets helped in “both the wealth business, in terms of the assets we manage, as well as our investment management business,” Chief Financial Officer Jonathan Pruzan says.

Earnings Preview

  • 2Q EPS estimate $1.15 (range $1.03 to $1.29)
  • 2Q net revenue estimate $10.03 billion (range $9.71 billion to $10.66 billion)
  • 4Q equities trading revenue estimate $2.30 billion (Bloomberg MODL, 6 ests.)
  • FICC $1.35 billion (6 ests.)
  • I-banking revenue est. $1.56 billion
  • 2Q Preview Call 8:30am 877-895-9527 password: 8194229

Analysts cut estimatesclast quarter  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 $44.07 USD +0.27 (+0.62%)

Highlights

  • Morgan Stanley’s wealth management division posted a record $4.41 billion in revenue, exceeding analyst’s estimate by $60 million
  • MS's investment management division posted $839 million in revenue, exceeding estimates by about $130 million. The business benefited from “higher assets under management” across asset classes, according to the firm.
  • MS's biggest business, institutional securities, which houses its Wall Street investment banking and trading operations came under pressure
  • Equities trading produced $2.13 billion in revenue, under the $2.2 billion estimate of analysts surveyed by FactSet.
  • Fixed income trading made $1.13 billion in revenue, missing the $1.32 billion estimate.
  • Investment banking generated $1.47 billion in revenue, ahead of the $1.4 billion estimate.
  • The bank saw net interest income fall to $1 billion in the quarter and said it could be impacted later this year if the market’s assumptions on rate cuts are realized, Pruzan said.

A rate cut could assist trading desks if it produced the right type of volatility, Pruzan added. Net interest income “is important to us, but not as important as it is to some of the other banks,” Gorman said Thursday on the analyst conference call.

“It’s clearly a headwind, but its not like we don’t have some other things going on under the hood here.”

The firm said last month it won permission from the Federal Reserve to increase its quarterly dividend to 35 cents a share from 30 cents and repurchase $6 billion in shares.

 

Morgan Stanley Q1 Earnings Recap

$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.

 

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