Morgan Stanleyshares popped after the firm exceeded analysts’ profit estimates and each of its three main businesses produced more revenue than expected.
The bank said Thursday that fourth-quarter profit surged (% to $ 2.) ****************************************** (billion, or $ 1.) ****************************************** a share, compared with the cent estimate of analysts surveyed by Refinitiv. Revenue climbed (**********************************% to $ 11. billion, exceeding the $ 9. (billion estimate by more than $ 1 billion.
Shares of the firm rose 2.7% in premarket trading.
“We delivered strong quarterly earnings across all of our businesses,” CEOJames Gormansaid in the release. “Firmwide revenue were over $ 11 billion for the fourth consecutive quarter, resulting in record full year revenue and net income. This consistent performance met all of our stated performance targets. “
In a quarter in which competitors fromJP Morgan ChasetoGoldman Sachsposted huge rebounds to fixed income trading revenue, analysts wanted to see if Morgan Stanley would follow suit.
It did: Bond trading helped power the firm’s institutional securities division to a (****************************************% jump in revenue to $ 5. (billion, compared to the $ 4.) ************************************** billion billion. Fixed income trading produced $ 1. 30 billion in revenue, compared with the $ 2020. 5 million estimate. Equity trading revenue essentially matched expectations at $ 1. billion, as did investment banking at $ 1. 93 billion.
At the firm’s massive wealth management division, revenue rose (% to $ 4.) billion, edging out the $ 4. 39 billion estimate as rising markets improved asset and transalevels.
But it was the firm’s smallest division, investment management, that exceeded expectations by the most, driving the company overall revenue beat. The business produced $ 1. billion in revenue , almost 100% more than a year earlier and exceeding the $ (***************************. 2 million estimate by more than a half billion dollars.
Gorman has tilted Morgan Stanley towards wealth management and overhauled its once-struggling bond trading division. But the trading and advisory operations are still a crucial part of the company’s business mix.
Last month, Morgan Stanleycut roughly 2 % of its workforcedue to an uncertain global economic outlook, a cull that hit technology and operations roles the hardest, people with knowledge of the matter said.
Morgan Stanley is the last of the six largest US banks to report results.
Earlier this week, J.P. Morgan,Citigroup, andBank of Americaposted profits thatbeat analysts’ expectationson surging bond-trading results. Results at Wells Fargo and Goldman Sachs were both marred by legal expenses tied to scandals: At Wells, legal charges were tied to its fake accounts issue, while Goldman neared a decision to its 1MDB investigation.
Here’s what Wall Street expected:
Earnings: cents a share, (*****************************************% higher than a year earlier , according to Refinitiv
Revenue: $ 9. (billion,) % higher than a year earlier
Wealth management: $ 4. billion, according to FactSet
Trading: Equities $ 1. (billion, Fixed Income $) **************************. 5 million
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