Morgan Stanley beats profit estimates as wealth management and bond-trading revenue outperform

Jame Gorman firm reports first-quarter earnings today.

caption
Jame Gorman firm reports first-quarter earnings today.
source
Reuters/ Yuri Gripas

  • Morgan Stanley reported first-quarter earnings Wednesday that beat analyst expectations on higher than expected revenue from trading and wealth management activities.

Morgan Stanley posted $1.39 in first quarter earnings-per-share, outpacing the $1.17 that Wall Street analysts surveyed by Bloomberg were expecting as bond trading and wealth management revenue came in higher than anticipated. Results were helped by a $101 million tax benefit.

Here are the key numbers:

  • Net income: $2.4 billion versus the $2 billion estimate
  • Revenue: $10.3 billion versus the $9.9 billion estimate
  • Expenses: $7.3 billion versus the $7.2 billion estimate
  • Return on equity: 13.1%
  • Institutional securities: $5.2 billion versus the $5.1 billion estimate of KBW analysts.
    • Investment banking: $1.2 billion versus KBW’s $1.4 billion estimate
    • Equities trading: $2 billion, missing the $2.1 billion estimate
    • Fixed-income trading: $1.7 billion, beating the $1.5 billion estimate, on gains in “client structuring activity within credit risk management” and credit trading.
  • Wealth management: $4.4 billion versus KBW’s $4.1 billion estimate.
  • Investment management: $804 million versus the $722 million KBW estimate.

“We delivered solid earnings despite a slow start to the year following the turbulent markets in the fourth quarter,” CEO James Gorman said in the statement. “Our results demonstrated the stability and breadth of our global franchise. Even though risks to the global environment remain, markets have recovered and we are well positioned to serve our clients and invest in our businesses.”