Morgan Stanley (NYSE:MS) beat earnings estimates for the first quarter, posting earnings of 55 cents per share and revenue of $7.8 billion. Analysts had been expecting 46 cents per share in earnings and $8.52 billion in revenue. The firm’s profits tumbled 54.4% year over year due to significantly lower revenues in fixed income, it said this morning. In last year’s first quarter, Morgan Stanley posted earnings of $1.18 per share and revenues of $1.1 billion.

Morgan Stanley (MS) Beats Earnings Estimates

Morgan Stanley struggles in fixed income, commodities

Morgan Stanley’s Institutional Securities segment recorded net revenues of $3.7 billion as a result of the shortcomings in fixed income and commodities. Trading and underwriting also weighed on the segment’s results, although Equity revenues and trading and merger and acquisition advisory services posted strong results. The Wealth Management segment also recorded $3.7 billion in net revenues on the back of strong growth in net interest income, although transactional revenues were weak in the first quarter. The business also recorded $5.9 billion in fee-based asset flows.

The Investment Management division saw net revenues of $477 million as a result of losses in private equity and real estate and stable asset management fees. The firm had $405 billion in assets under management or supervision at the end of the first quarter.

Morgan Stanley updates capital ratios

Morgan Stanley had a Common Equity Tier 1 ratio of 15.7% under the Basel III Advanced Approach at the end of the first quarter. The firm’s Tier 1 risk-based capital ratio was 17.4% under the advanced approach. Morgan Stanley estimated its pro forma fully phased-in Common Equity Tier 1 risk-based capital ratio at 14.5% as of the end of the quarter and its pro forma fully phased-in Supplementary Leverage Ratio at about 6% as of the end of the quarter.

The firm’s book value per share was $35.34, while its tangible book value per share was $30.44 per share based on 1.9 billion outstanding shares.

Morgan Stanley’s shares climbed 2.83% to $26.50 per share in premarket trading this morning.