Finance News

Morgan Stanley beats earnings estimates with better-than-expected industrial and funding banking outcomes

James Gorman, Chairman and CEO of Morgan Stanley, speaks during an interview with Bloomberg Television in Beijing, China on Thursday May 30, 2019.

Giulia Marchi | Bloomberg | Getty Images

Morgan Stanley said Friday that first quarter earnings and sales exceeded expectations for more than expected trade and investment banking results.

The bank posted earnings of $ 4.1 billion, or $ 2.19 per share, more than double its earnings of $ 1.7 billion for the same period last year. The company stated that adjusted earnings, excluding merger-related charges, were $ 2.22 per share. Analysts had expected USD 1.70.

Company-wide revenue rose 61% to a record $ 15.7 billion, beating analysts' estimate by $ 1.6 billion. This was aided by robust revenues from the company's trading and banking operations on Wall Street. Expectations were high after competitors posted strong commercial and investment banking results. The boom in SPAC issuance has led to an increase in stock market counter fees, and trading counters benefited from strong activity in the bond and stock markets.

Fixed income trading desks had revenue of $ 2.97 billion, nearly $ 850 million more than analysts expected for the quarter due to strong results in credit trading. Stock trading generated sales of $ 2.88 billion, or about $ 170 million more than estimated.

Investment banking revenue rose 128% to $ 2.61 billion, beating estimates by nearly $ 500 million.

CEO James Gorman announced deals worth $ 20 billion last year. This was the most aggressive takeover since the financial crisis. He spent $ 13 billion to acquire E-Trade to expand his reach with the wealthy and $ 7 billion to buy Eaton Vance to expand his investment management business. The acquisition of Eaton Vance was completed in the first quarter.

Morgan Stanley is the last of the six largest US banks to post profits in the first quarter.

JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup all beat analysts' expectations by releasing money previously earmarked for credit losses. Main competitor Goldman Sachs beat estimates for strong advisory and trading results.

Here's what Wall Street expected:

Earnings: $ 1.70 per share, 68% higher than a year earlier, according to Refinitiv

Revenue: $ 14.1 billion, up 49% from a year earlier

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