Morgan Stanley (NYSE:MS) posted fourth quarter results before opening bell this morning, reporting earnings of 20 cents per share on revenue of $7.8 billion for the quarter. However, excluding items, earnings would have been 50 cents per share.

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As a result, Morgan Stanley stock rose as much as 2% in premarket trading right after the results were announced.

Morgan Stanley’s results weighed down by expenses

Analysts had been expecting Morgan Stanley to report earnings per share of 47 cents on revenue of $8.04 million. The firm’s fourth quarter legal expenses were $1.2 billion or 40 cents per share. It also had a negative effect on its revenue in connection with changes in its debt-related credit spreads and “other credit factors.” Morgan Stanley (NYSE:MS) also received a small tax benefit of $192 million or 10 cents per share.

After adjusting for these items, earnings per share ended up being 50 cents. Earnings per share from continuing operations were 7 cents. Excluding debt valuation adjustment (DVA), net revenues were $8.2 billion and earnings per diluted share from continuing operations were 20 cents. DVA was reported to be $386 million in the fourth quarter, compared to $511 million a year ago.

In the same quarter a year ago, Morgan Stanley reported income of $661 million or 33 cents per share.

Morgan Stanley breaks down results

From Morgan Stanley (NYSE:MS)’s Institutional Securities division, net revenues excluding DVA were reported to be $3.7 billion, which indicates strong performance in sales and trading for the firm’s Investment Banking and Equity businesses. Net revenues from the firm’s Wealth Management business were $3.7 billion with a 19% pretax margin or 20% excluding an impairment charge. Morgan Stanley reported $11.6 billion in fee-based asset flows during the quarter and a record $1.9 trillion in total client assets at the end of the quarter. The firm’s Investment Management business posted $842 million in net revenues with $373 billion in assets under management.

Full-year results

For the full year, Morgan Stanley reported $32.4 billion in net revenues. That’s compared to $26.1 billion in 2012. Income from continuing operations in 2013 was $3.3 billion or $1.43 per share. That’s compared to income of $138 million or 2 cents per share in 2012.

During the December quarter, the firm bought back $228 million of its common shares, which was about 7.6 million of them, and during all of 2013, it bought back $350 million of its common stock or about 12.2 million. The company declared a quarterly dividend of 5 cents per share payable on Feb. 14 to shareholders of record on Jan. 31.