Morgan Stanley (MS) reported better than expected earnings alomng with other major banks beating before the open. The stock rose 3% in early trading bouyed by wealth management revenues.
Morgan Stanley (MS) on Wednesday reported second quarter 2017 earnings before the bell beating analyst expectations. $MS followed the other major banks with solid wealth and institutional revenues.
Earnings: Net revenues of $9.5 billion and earnings per share of 87 cents, versus $8.9 billion and 75 cents per share in the year-ago quarter. Beating the FactSet consensus estimate of 76 cents per share on $9.1 billion of revenue.
Reaction: Morgan Stanley NYSE: $MS $46.51 +1.37 (+3.03%)
Chairman and CEO James Gorman said MS operated in a “subdued trading environment”, however revenues from institutional securities, wealth management, and investment management were all higher than a year ago.
“Our second quarter results demonstrated the resilience of our franchise in a subdued trading environment. Our wealth management business produced a 25% margin and our strong investment banking results attest to the diversity of our global business. We continue to deliver on our strategic goals and grow shareholder returns.” said James Gorman
- Investment banking revenues were $1.4 billion compared to $1.1 billion a year ago,
- Sales and trading fell to $3.2 billion, versus $3.3 billion in 2016.
- Wealth management revenues came in at $4.2bn, up from $3.8b billion a year ago
- Institutional securities net revenues rose to $4.8 billion from $4.6 billion a year ago,
- Investment management net revenues increased to $665 million from $583 million a year ago.
Share Repurchases and Dividends
MS BoD declared a dividend of $0.25 per share. The quarterly dividend is payable on August 15 2017 to shareholders of record on July 31, 2017. This represents a 25% hike from the prior payout.
During the reported quarter, Morgan Stanley bought back around 12 million shares for nearly $500 million. This was part of the company’s 2016 capital plan.
As of Jun 30, 2017, book value per share was $38.22, up from $36.29 as of Jun 30, 2016. Tangible book value per share was $33.24, up from $31.39 as of Jun 30, 2016.
Morgan Stanley’s Tier 1 capital ratio Advanced (Transitional) was 18.9%, up from 18.8% in the year-ago quarter. Tier 1 common equity ratio Advanced (Transitional) was 16.6% compared with 16.8% in the prior-year quarter.
Source: MS, AlphaStreet
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