Proactive Investors - Run By Investors For Investors

Morgan Stanley reports stronger-than-expected 66% Q2 profit leap

Morgan Stanley (NYSE:MS), the sixth-largest U.S. bank, said its second-quarter profit rose 66 percent, topping analysts' predictions, as revenue from equities trading, wealth-management and investment banking increased. Shares jumped in premarket.
Morgan Stanley reports stronger-than-expected 66% Q2 profit leap

Morgan Stanley (NYSE:MS), the sixth-largest U.S. bank, said its second-quarter profit rose 66 percent, topping analysts' predictions, as revenue from equities trading, wealth-management and investment banking increased. Shares jumped in premarket.

Net income for the three months that ended June 30 rose to $980 million, or 41 cents a share, from $591 million, or 29 cents a share, a year earlier, the New York-based firm said in a statement on Thursday. Taking out the value of the firm's debt, or DVA, in addition to one-time items, the company earned 45 cents a share, above the 43 cents predicted by 22 analysts on average.

Quarterly revenue, stripping out accounting adjustments, advanced to $8.33 billion from $6.6 billion a year earlier. That beat analysts' estimate of $7.89 billion. 

Morgan Stanley shares climbed 4.6 percent to $27.75 at 8:21 a.m. in New York on Thursday, headed for the highest price in more than a year. The shares have rises approximately 39 percent so far this year, compared with a 26 percent gain for JPMorgan Chase & Co. (NYSE:JPM), the largest U.S. bank by assets.

“This quarter, we saw significant year-over-year revenue growth in each of our five major business units and higher year-over-year profitability," Chief Executive Officer James Gorman said in the statement.

"Equity sales and trading results were strong across all products and regions, while investment banking delivered top-three rankings in announced and completed M&A, global equity offerings and global IPOs," he added.

Wealth management revenue grew 10 percent to $3.53 billion, accounting for a profit margin of 18.5 percent. Revenue from investment banking jumped 22 percent to $1.08 billion. Equities sales and trading rose 58 percent to $1.81 billion, excluding DVA. Fixed-income revenue rose 50 percent from $770 million.

Revenue from debt underwriting increased about 24 percent to $418 million, while revenue from equity underwriting rose about 16 percent to $327 million.

Asset management reported a pretax profit of $160 million, up from $43 million in the year-earlier period.

Morgan Stanley is the last of the six biggest U.S. banks to report better-than-expected second-quarter net income. On Wednesday, Bank of America Corp. (NYSE:BAC), the second-biggest U.S. lender, posted a 63 percent increase as revenue from equities sales and trading increased and expenses decreased.

On Tuesday, Goldman Sachs Group Inc. (NYSE:GS), the fifth-largest U.S. bank by assets, said profit doubled to $1.93 billion, or $3.70 a share, as revenue from investing and trading leaped. 

On Monday, Citigroup Inc. (NYSE:C), the third-largest U.S. bank by assets, reported a 42 percent gain to $4.18 billion, or $1.34 a share, as stock-trading revenue increased and losses on mortgages dropped. 

Last Friday, JPMorgan posted 31 percent increase to $6.5 billion, or $1.60 a share, as its trading revenue rallied and it shaved more provisions for bad loans. Also on Friday, Wells Fargo & Co. (NYSE:WFC), the fourth-biggest U.S. bank by assets, reported a 20 percent rise to $5.52 billion, or 98 cents a share, as it set aside less money to cover bad loans. 

View full MS profile View Profile

Morgan Stanley Timeline

Related Articles

1549886982_asia.jpg
February 28 2019
Investment company Adamas, under Harmony Capital’s management, is focused on opportunities in the SME sector
Blockchain technology
June 07 2019
The investment firm finances and manages the development of early-stage blockchain technology companies
Blockchain technology
March 22 2019
The firm’s services include the authoring of industry standard White Papers, technical aspects, design and implementation of market strategies and business appraisals

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use