Morgan Stanley tops estimates with profit up 20% … MARKETWATCH October 16, 2018 at 12:42PM

Morgan Stanley tops estimates with profit up 20% … MARKETWATCH


Morgan Stanley tops estimates with profit up 20%

By Liz Hoffman

Morgan Stanley said Tuesday its third-quarter profit rose 20%, as the Wall Street firm started the final day of a big-bank earnings season that reflected the strength of
the economy in the face of geopolitical turmoil.

The firm, run by Chief Executive and Chairman James Gorman, reported profit of $2.15 billion on $9.87 billion in revenue, both better than a year ago.

Earnings per share of $1.17 exceeded the expectations of analysts polled by Refinitiv, who predicted $1.01 per share.

Most of the big U.S. banks to report quarterly earnings so far have bested expectations. Goldman Sachs Group Inc. reports later this morning.

Morgan Stanley is in the late innings of a multiyear turnaround under Mr. Gorman, a matter-of-fact Australian who spent a decade as a McKinsey & Co. consultant before coming to Wall Street. He has pared its freewheeling
trading and principal-investing operations — responsible for billions of dollars in crisis-era losses — and doubled down on wealth management.

The retail brokerage, which manages money for about 3.5 million U.S. households, posted revenue in the quarter of $4.4 billion, up 4% from a year ago. Its assets under management climbed to $2.5 trillion, a record
closing in on Bank of America Corp.’s Merrill Lynch unit.

Morgan Stanley’s Wall Street businesses held up well despite the seasonal late-summer lull. Trading revenue rose 8% from a year earlier to $3.1 billion, while investment banking revenue was 15% higher, driven
mostly by stock underwriting.

Those businesses — which Mr. Gorman calls the “engine” to the firm’s “ballast,” the steadier retail brokerage — were united earlier this year under executive Ted Pick.

Morgan Stanley’s shares were flat in premarket trading. Its shares are down more than 17% this year, worse than any other big U.S. bank.


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