Morgan Stanley (MS) Smashes Earnings Expectations

Morgan Stanley (MS) Smashes Earnings Expectations

Morgan Stanley (NYSE:MS) released the results from its most recently completed quarter this morning, posting net income of 74 cents per share, compared to 48 cents per share in the same quarter a year ago. Revenue for the quarter rose to $8.9 billion from $8.15 billion a year ago. Income from continuing operations was 72 cents per share or $1.5 billion. That included positive impacts from changes in the firm’s debt-related credit spreads and other credit factors, which had a $126 million positive impact. Without those positive impacts, income from continuing operations would have been 68 cents per share.

Analysts had been expecting the firm to post earnings per share of 60 cents on revenue of $8.52 billion. Net income was $1.5 billion, compared to $981 million in the same quarter a year ago.

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Breaking down Morgan Stanley’ results

The firm reported wealth management profits of $3.6 billion for the quarter, a slight increase from last year’s $3.5 billion.  Fee-based asset flows hit a new record of $19 billion, with total client assets passing $1.9 trillion at the end of the quarter. FICC revenue was $1.7 billion, compared to $1.5 billion in the same quarter a year ago.

Morgan Stanley (NYSE:MS) said net revenues from Institutional Securities, excluding debt valuation adjustments, were $4.5 billion, which it said reflex continued strength in sales of equities and investment banking. The firm’s fixed income and commodities sales and trading divisions also improved. Investment Management posted net revenues of $740 million with $382 million in assets under management.

James P. Gorman, Chairman and CEO of Morgan Stanley (NYSE:MS) said in a statement, “This quarter we generated higher year-over-year revenues in all three of our business segments, demonstrating the momentum we have built across the Firm. We continue to execute on our multi-year strategy to deliver consistent returns for our shareholders through revenue growth and strong expense discipline. We are pleased that this year we will commence a further share repurchase of up to $1 billion and double our dividend.”

Morgan Stanley (NYSE:MS) reported a Common Equity Tier 1 capital ratio of 14.1% and a Tier 1 Capital ratio of about 15.6% at the end of March. The firm became subject to the Basel III final rule starting January 1 of this year. It reports that parts of the new requirements are still under transitional provisions while others are in full effect.

Morgan Stanley doubles dividend

Morgan Stanley (NYSE:MS) also reported that it will double its quarterly dividend, bringing it from 5 cents to 10 cents per share. The firm bought back about $150 million worth of common shares, which amounted to about 4.9 million shares. Morgan Stanley also announced a share repurchase plan of up to 1 billion starting in the current quarter and running through the end of the first quarter of next year.

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