Morgan Stanley Chairman and Chief Executive James Gorman speaks throughout the Institute of International Finance Annual Meeting in Washington, October 10, 2014.
Joshua Roberts | Reuters
Morgan Stanley posted third-quarter results Wednesday that topped profit estimates on better-than-expected trading revenue.
Here’s what the corporate reported:
- Earnings per share: $1.38, vs. $1.28 estimate from LSEG, formerly generally known as Refinitiv
- Revenue: $13.27 billion, vs. expected $13.23 billion
Profit fell 9% to $2.41 billion, or $1.38 a share, from a 12 months ago, the Recent York-based bank said in a statement. Revenue grew 2% to $13.27 billion, essentially matching expectations.
Morgan Stanley’s trading operations helped offset revenue misses elsewhere on the firm. The bank’s bond traders produced $1.95 billion in revenue, roughly $200 million greater than the StreetAccount estimate, while equity traders brought in $2.51 billion in revenue, $100 million greater than expected.
However the bank’s all-important wealth management division generated $6.4 billion in revenue, below the estimate by greater than $200 million, as compensation costs within the division rose.
Investment banking accounted for one more miss within the quarter, producing $938 million in revenue, below the $1.11 billion estimate, as the corporate cited weakness in mergers and IPO listings. The bank’s investment management division essentially met expectations with $1.34 billion in revenue.
Shares of Morgan Stanley dipped 3.2% in premarket trading.
CEO James Gorman cited a “mixed” environment for his businesses and acknowledged that the firm’s wealth management division gathered fewer net assets than in recent quarters. The wealth management business was still tracking to hit his three-year goal of generating $1 trillion in latest assets, he told analysts Wednesday.
Led by Gorman since 2010, Morgan Stanley has managed to avoid the turbulence afflicting some rivals these days. While Goldman Sachs was forced to pivot after a foray into retail banking and as Citigroup struggles to lift its stock price, the essential query at Morgan Stanley is about an orderly CEO succession.
In May, Gorman announced his plan to resign inside a 12 months, capping a successful tenure marked by massive acquisitions in wealth and asset management. Morgan Stanley’s board has narrowed the seek for his successor to 3 internal executives, he said on the time.
Gorman reiterated his desire handy over the CEO position to a successor inside months.
“This firm is in excellent shape notwithstanding the geopolitical and market turmoil that we discover ourselves in,” Gorman said. “My hope and expectation is handy over Morgan Stanley with as clean a slate as possible and cope with as few of our outstanding issues in the following couple of months.”
Last week, JPMorgan Chase, Wells Fargo and Citigroup each topped expectations for third-quarter profit, helped by low credit costs. Goldman Sachs and Bank of America also beat estimates on stronger-than-expected bond trading results.
This story is developing. Please check back for updates.
