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 07:45 ET (11:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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