Morgan Stanley’s Q4 Profit Beats Estimates

Morgan Stanley’s Q4 Profit Beats Estimates

Morgan Stanley's Q4 Profit Beats Estimates

Morgan Stanley (NYSE:MS) returned to profit in the fourth quarter backed by strong revenue from its institutional securities segment.

Morgan Stanley (NYSE:MS) announced its fourth quarter earnings today, net revenues of $7.0 billion for the fourth quarter ended December 31, 2012 compared with $5.7 billion a year ago. For the quarter, income from continuing operations applicable to Morgan Stanley (NYSE:MS) was $573 million, or $0.28 per diluted share, including a net tax benefit of approximately $155 million, against a loss of $222 million, or a loss of $0.13 per diluted share for the same quarter a year ago.

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Analysts polled by Thomson Reuters expected earnings of 27 cents, excluding debt valuation adjustments, on revenue of $7 billion.

James P. Gorman, Chairman and Chief Executive Officer said, “After a year of significant challenges, Morgan Stanley (NYSE:MS)  has reached a pivot point. We demonstrated meaningful progress in our Wealth Management Joint Venture, reaching the highest pre-tax margin since the inception of the JV. We charted a path to acquire the remainder of the JV. We are ahead of our risk-weighted asset reduction targets for Fixed Income and Commodities, while continuing to focus on our strengths within business and strategic linkages across the Firm and investing for the evolving regulatory environment. We continued to demonstrate leadership in Investment Banking and Equity sales and trading. Our Firm is now poised to reach the returns of which it is capable on behalf of our shareholders.”

Segment wise, revenues from Global Wealth Management were $3.5 billion, and pre-tax margin was 17%. Institutional Securities net revenues excluding DVA were $3.5 billion, showcasing robust performance Investment Banking. Asset management group posted net revenues of $599 million with assets under management or supervision of $338 billion.

Revenues for the full year stood at $26.1 billion against $32.2 billion a year ago. Income from continuing operations for the company was $48 million, or a loss of $0.03 per diluted share, against an income of $4.2 billion, or $1.26 per diluted share,a year ago.

As on 31st December 2012, banks Tier 1 capital ratio under Basel I stood at 17.9 percent and Tier 1 common ratio was approximately 14.7 percent.

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