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Morgan Stanley CEO James Gorman speaks in New York, May 6, 2014.
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Morgan Stanley Tuesday to publish Second-quarter earnings and revenue that beat analyst expectations, supported by record wealth management results.
This is what the company reported:
- Earnings: $1.24 per share versus $1.15 per share, as estimated by Refinitiv
- Revenue: $13.46 billion, compared to an expected $13.08 billion
The bank said profits fell 13% to $2.18 billion, or $1.24 per share, on lower trading results than a year ago, and a round of layoffs that led to $308 million in severance costs. Revenue increased 2% to $13.46 billion.
Under CEO James Gorman, Morgan Stanley Wealth Management’s reliance has helped its steady earnings and boosted its valuation relative to its peers. Gorman, who took over the company in 2010, said in May that he was preparing to step down in a year’s time, launching a succession race for the Wall Street powerhouse.
“The company delivered strong results in a challenging market environment,” Gorman said in the earnings release. “The quarter started with macroeconomic uncertainties and weak client activity, but ended on a more constructive note.”
Despite lower market levels causing some fees to fall from a year ago, wealth management revenue in the second quarter rose 16% to $6.66 billion as interest income rose, beating analysts’ estimates of $6.5 billion surveyed by FactSet. The division secured $90 billion in net new customer assets.
The Wall Street division of the bank fared less successfully. The institutional securities business reported an 8% decline in revenue to $5.65 billion, driven by lower trading. While equity trading generated $2.55 billion in revenue, topping FactSet’s estimate of $2.37 billion, fixed income generated $1.72 billion, well below the $1.99 billion estimate.
Investment banking revenue of $1.08 billion was roughly unchanged from a year ago and basically matched analysts’ expectations.
Morgan Stanley shares are up slightly this year, compared to a drop of about 20% for the KBW Bank index.
Friday, c. B. Morgan ChaseAnd Citigroup And Wells Fargo Each posted profits that beat analysts’ expectations amid rising interest rates. Goldman Sachs The major banks’ earnings close on Wednesday.
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