Morgan Stanley Gets Boost From Trading as Profit Rises -- Update
October 19 2016 - 7:39AM
Dow Jones News
By Liz Hoffman
Morgan Stanley said its quarterly earnings rose, beating
expectations, as the big Wall Street firm benefitted from a trading
rebound that has helped the country's largest banks.
The New York-based firm reported a profit of $1.6 billion, or 81
cents a share. That compares with the $1.02 billion, or 48 cents a
share, it reported in the same period last year.
Revenue grew to $8.91 billion from $7.77 billion a year earlier,
when sluggish trading activity and losses in its Asia
private-equity portfolio caused Morgan Stanley to post one of its
worst quarters under Chief Executive and Chairman James Gorman.
Analysts polled by Thomson Reuters had expected Morgan Stanley
to earn 63 cents a share on revenue of $8.17 billion.
Shares edged up 0.6% premarket.
Trading revenue rose 29% to $2.61 billion, with increases in
both fixed-income and equities trading.
The firm's return on equity, a closely watched measure of
profitability, was 8.7% in the third quarter, versus 5.6% a year
ago. Mr. Gorman has set a goal of 10% by 2017, and the firm has
shown unsteady progress toward meeting it.
Morgan Stanley shares have outperformed its biggest peers since
mid-summer, up 24% since July 1, and are roughly flat on the
year.
Last among big banks to report third-quarter earnings, Morgan
Stanley faced generally high expectations. Rivals reported strong
results in their trading and investment banking businesses, both
big divisions at Morgan Stanley.
Write to Liz Hoffman at liz.hoffman@wsj.com
(END) Dow Jones Newswires
October 19, 2016 07:24 ET (11:24 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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