Morgan Stanley Earnings Cruise Past Expectations

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On Tuesday, Morgan Stanley cruised past expectations on Wall Street for its results during the third quarter thanks to a strong performance from its dealmakers and wealth management unit.

The bank posted earnings per share of 93 cents, while Wall Street analysts expected the investment bank to earn 81 cents per share.

The results from the third quarter reflected stability in the Wealth Management, Investment Management and Investment Banking businesses when the Trading and Sales business faced an environment that is subdued, said James Gorman the CEO at Morgan Stanley.

Revenues at the bank reached $9.2 billion, which beats expectations on Wall Street of $9.04 billion and were up from the same quarter during 2016 of $8.9 billion.

Morgan Stanley’s net income reached $1.8 billion, which beat analyst expectations of just over $1.5 billion and increased from the $1.6 billion from the same quarter one year ago.

Its Wealth Management business ended the quarter with revenues of $4.2 billion, which were up from more than $3.9 billion from the same three-month period one year ago. The banks fee-based assets that are under its management were able to reach a record high of $1 trillion.

Revenues from investment banking reached $1.3 billion which were higher than the same period last year of $1.1 billion.

Morgan Stanley’s trading revenues reached $2.9 billion, which missed estimates of just over $3 billion and were down from last year

Fixed-income, currencies and commodities trading revenue was $1.2 billion which was down from last year’s $1.5 billion during the quarter.

Morgan Stanley’s strong results came despite a heavy hit, which was not unexpected, to its trading unit. While its fixed-income, commodities and currencies (FICC) trading dropped by 20%, equities trading was nearly flat even compared to one year ago with revenues reach $1.9 billion.

Through three quarters of 2017, trading at the bank is up to just over $8.9 billion in comparison to last year’s balance through three quarters of $7.4 billion.

FICC trading revenues have suffered in particular at big banks, with Citi posting a drop of 16%, Bank of American reported a fall of 22% and JPMorgan posting a slide of 27%.

Nonetheless, all three of the banks that are highly competitive one against the other, beat expectations on Wall Street handily for earnings last week and posted results that were otherwise positive.

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