MS Morgan Stanley

By Liz Hoffman 

Morgan Stanley's third-quarter profit rose 3% from a year ago, the last major U.S. bank to skate through a period of global tensions and shifting markets.

The bank on Thursday reported a profit of $2.17 billion, or $1.27 a share, on $10.03 billion in revenue, well above what analysts had expected. Shares rose 4% in trading before the market opened.

Analysts polled by FactSet had expected a profit of $1.83 billion, or $1.11 a share, on $9.59 billion in revenue. Morgan Stanley picked up about 7 cents a share in earnings thanks to a tax benefit; pretax profits were 5% lower than a year ago.

Morgan Stanley is the last of the big U.S. banks to report earnings for the third quarter, a stretch in which two Federal Reserve interest-rate cuts and growing global tensions upended the relative calm and easy financial policies that have helped banks thrive in recent years.

The results were mixed: Profits rose at JPMorgan Chase & Co. and Citigroup Inc., driven by strong consumer-banking businesses. Goldman Sachs Group Inc., Bank of America Corp. and Wells Fargo & Co. posted lower profits, though the drops at the latter two owed largely to one-time charges.

Morgan Stanley's return on equity, a measure of profitability, was 11.2% for the quarter, versus a range of 9% to 15% at peers that have already reported.

Chief Executive James Gorman, in the job since 2010, has transformed Morgan Stanley from Wall Street's problem child into one of its steadier performers. He cut costs, shrank the firm's trading division, and doubled down on wealth management, a steadier business that now accounts for nearly half of Morgan Stanley's revenue and ties up little of its capital.

Write to Liz Hoffman at liz.hoffman@wsj.com

(END) Dow Jones Newswires

October 17, 2019 08:11 ET (12:11 GMT)

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