Morgan Stanley Q2 Earnings and Comparison with JPM, WFC, GS, C, BAC

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Morgan Stanley Q2 Earnings and Comparison with JPM, WFC, GS, C, BAC

Morgan Stanley (NYSE:MS) has unveiled its quarterly earnings , here is a roundup of how the investment bank performed in this quarter:

  • MS reported earnings of 29 cents per diluted share (including DVA, see end of article for explanation) which falls below analyst estimates of an average profit of 32 cents. As the firm reported only losses in the last quarter of 2012 (6 cents per share or $94 million) the report of profits is refreshing. For the same quarter of last year, MS reported a loss of 38 cents per share.
  • The total income from continuing operations was  $563 million for this quarter.
  • Total revenues for this quarter amounted to $7.0 billion , this falls below the average of analyst’s predictions that equaled $7.76 billion . Analysts estimated a total revenue of $30.17 billion for this year. Morgan Stanley revenues for last quarter were $8.9 billion, and for the last year were  $9.2 billion.
  • Compensation expenses were $3.6 billion, which is a decrease from $4.6 billion a year ago. Non-compensation expenses equaled $2.4 billion, which declined from $2.6 billion a year ago.

With these earnings, Morgan Stanley broke the spell of losses that were reported over the last two quarters. Revenue fell 26.3% in the last quarter of the 2011 and dropped again in the first quarter, as mentioned above.

Comparison of MS with JPM, WFC, GS, C and BAC

Morgan Stanley is the last major US bank to report earnings for this quarter. When compared to the previous reports by other players in the banking sector, we see that only Wells Fargo (NYSE:WFC) and JPMorgan (NYSE:JPM) have performed well in this quarter. WFC beat analysts’ expectations by reporting  considerable profits and marked its tenth quarter with consistent EPS growth. Although JPM suffered huge losses, they still managed to post decent and unexpected profits. A short summary of the quarterly earnings of these banks is listed below:

JPMorgan Chase & Co (NYSE:JPM) profits per share declined from 131 cents in Q1 2012 to 121 cents per share for this quarter. The total revenue was 22.9 billion with 5 billion in profits. The losses for Q2 went above $4.4 billion.

Wells Fargo and Co (NYSE:WFC) profits per share rose from 75 cents in the last quarter to 82 cents for the April-June spell. The total revenue equaled to $21.3 billion, while the profits were $4.6 billion. Total losses were $524 million.

Goldman Sachs (NYSE:GS) profits fell from $9.9 billion in Q1 2012 to $6.6 billion for the second quarter, diluted earnings per share fell to 178 cents from 392 cents. The total profit posted for this quarter was only $962 million.

Citigroup Inc (NYSE:C) posted earnings of 100 cents per share, while earnings for last quarter were 111 cents per share. The revenue for this quarter totaled $18.6 billion.

Bank of America Corp (NYSE:BAC) reported earnings of of 19 cents a share, as opposed to loss of 90 cents/share in the last quarter. The net income of the bank amounted  to $2.5 billion for this quarter, while it incurred losses of $8.83 billion in the first quarter. Total revenues rose to $22.20 billion, from $13.48 billion a year ago.

Over this year MS stock has seen high and lows; From mid-April to mid-July, the share price decreased by a whopping 20.4% , from $17.66 to $14.05. The best performance of the stock has been in the first week of February, when the price raised consistently by $2.31 which equals to a 12.7% increase, and traded at $20.5.  The MS stock was trading at $13.99 when markets closed on Wednesday.

Morgan Stanley is one of the world’s largest investment banks, and America’s sixth largest bank by assets. It has more than 1,300 offices, in more than 40 nations, serving a wide range of clients. The bank’s clientele includes corporations, governments, financial institutions, and individuals.

 Represents the change in the fair value of certain of Morgan Stanley’s long-term and short-term borrowings, resulting from fluctuations in its credit spreads and other credit factors (commonly referred to as “DVA”)

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