Morgan Stanley (MS) Smashes Earnings Estimates

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Morgan Stanley (NYSE:MS) released the earnings results from its third quarter before opening bell this morning, posting earnings from continuing operations of 84 cents per share on $8.9 billion in revenue. Excluding DVA, Morgan Stanley reported $8.7 billion in net revenues and earnings from continuing operations of 77 cents per share.

Analysts had been expecting earnings of 54 cents per share on $8.16 billion in revenue. In the same quarter a year ago, revenue was $8 billion. Excluding DVA, net revenues were $8.1 billion in the same quarter last year.

Key metrics in Morgan Stanley’s earnings report

The third quarter’s results included positive impacts from changes in Morgan Stanley’s fair value of some of its short-term and long-term borrowings. The changes came from fluctuations in credit spreads and a number of other credit factors, which added up to $215 million.

Morgan Stanley’s earnings by segment

Morgan Stanley (NYSE:MS) reported net revenues of $4.3 billion, excluding DVA in its Institutional Securities segment. The firm reported strength in Equity and Investment Banking sales and improvements in Fixed Income and Commodities sales and trading.

Net revenues for Wealth Management were $3.8 billion for the third quarter. The firm reported a pretax margin of 22% for its Wealth Management segment and record revenue per financial advisor. Fee-based asset flows were $6.5 billion, while total client assets were higher than $2 trillion as of the end of the quarter.

Investment Management saw net revenues of $655 million. Assets under management or supervision were $398 billion as of the end of the quarter.

Morgan Stanley updates capital position

As of the end of the September Quarter, Morgan Stanley (NYSE:MS) saw a Common Equity Tier 1 risk-based capital ratio of about 14.3%. The firm’s Tier 1 risk-based capital ratio was about 16.1%.

Book value per share was $34.17, while tangible book value per common share was $29.25. Those numbers are based on about 2 billion outstanding shares. Morgan Stanley repurchased about $195 million worth of its shares, which amounted to about 5.9 million shares. The firm also declared a quarterly dividend of 10 cents. It will be paid to shareholders on Nov. 14 to those of record as of Oct. 31.

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