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