Morgan Stanley wraps up big-banks earnings results with a miss

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Morgan Stanley

Morgan Stanley (NYSE: MS) reported second-quarter financial results before the opening bell Thursday, July 18. The banking giant said quarterly profit declined 10% from a year ago, as some of its corporate borrowers pulled back due to the Federal Reserve’s recent stance to possibly cut interest rates.

Equities trading revenue fell 14%, while investment banking revenues dropped by 13% on a year-over-year basis due to slower market volume and fewer advisory deals. Morgan Stanley also upped its dividend by $0.35 per share and announced plans to buy back up $6 billion in stock by Q2 2020.

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Shares of the company were down 1.07% to $43.30 heading into Thursday’s open. The stock has gained more than 10% since the beginning of the year and has lost 11% in the last 12 months.

MS Earnings & Outlook

Morgan Stanley reported a profit of $2.2 billion, or $1.23 per share, down from the second quarter of the previous year, when the bank posted a profit of $2.44 billion, or $1.30 per share. The results beat the estimates of analysts, who were looking for Morgan Stanley to post earnings of $1.14 per share, according to data compiled by Refinitiv.

Companywide revenue came in at $10.24 billion, a 3% decline from $10.6 billion in the same period last year. On average, analysts surveyed by Refinitiv had been calling for revenue of $9.99 billion, 5.8% lower than a year ago.

The bank generated revenue of $4.41 billion in its wealth management unit, while its investment management segment brought in revenue of $839 million in the quarter. Analysts polled by Refinitiv were expecting revenues of $4.35 billion the company’s wealth management unit and $709 million in its investment management business.

Net interest income was $1.03 billion, compared with analysts’ expectations of $991.6 million.

Morgan Stanley CEO Comments

“We reported solid quarterly results across all our businesses. Firmwide revenues were over $10 billion and we produced an ROE within our target range, demonstrating the stability of our franchise. We remain focused on serving our clients and pursuing growth opportunities while diligently managing expenses.” Morgan Stanley Chairman and Chief Executive Officer James P. Gorman said in a press release.

Morgan Stanley Profile

Morgan Stanley is a global investment bank whose history, through its legacy firms, can be traced back to 1924. The company has institutional securities, wealth management, and asset management segments, as well as more than 60,000 employees.

Approximately half of the company’s net revenue is from its institutional securities business, with the other half coming from wealth and asset management. The company derives about 30% of its total revenue outside the Americas. – Warrior Trading News

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