The US Federal Reserve’s reluctance or inability to provide clearer rate hike timing guidelines to the market and mainland China’s turbulence have also taken their toll on Morgan Stanley’s returns from worldwide operations.
Advertisement
Halliburton (HAL.N) fell 1.5 percent to $37.26 after reporting a bigger-than-expected 36 percent drop in quarterly revenue, hurt by weak drilling activity and pricing in North America.
For the current quarter, net income applicable to Morgan Stanley was $1.0 billion, or $0.48 per diluted share, 7 contrast with net income of $1.7 billion, or $0.83 per diluted share, 7 for the same period a year ago.
Turbulence in financial markets last quarter caused major US banks to report drops in quarterly earnings, and Morgan Stanley was no exception. Asset management fee revenue ticked upward from $2.1 billion last year to $2.2 billion this year. Compensation and benefits expense were $3.44 billion, down 18% from $4.21 billion a year ago.
It was a hard quarter, Devin Ryan, an analyst at JMP Group Inc.in New York, said in an interview before the results were announced.
Shares of Morgan Stanley have fallen 13% since the start of 2015 compared with a 4.4% decrease in the KBW index of bank stocks over the same period.
PMC-Sierra climbed 14.4 percent after chipmaker Microsemi said it had offered to acquire the data storage and cloud computing company for about $2.2 billion. Analysts have cut Morgan Stanley from 68 cents to 63 cents, according to FactSet.
Revenue came in at $7.33 billion, missing analysts’ estimates of $8.54 billion. The institutional securities segment includes investment banking as well as sales and trading results. One research analyst has rated the stock with a sell rating, thirteen have issued a hold rating and eleven have assigned a buy rating to the company.
It’s beginning to look like Morgan Stanley’s traditional areas of focus – wealth management and equities – are the best places to be. The firm also named Dan Simkowitz, who was co-head of the unit that underwrites stocks and bonds, as head of its asset-management unit.
Jon Pruzan said in an interview.
Advertisement
The CBOE volatility index .VIX , often seen as a gauge of investors’ fears in Wall Street shares, fell to a two-month low of 15.05 percent. The probability of a USA rate increase this year has diminished to 40 per cent, from 64 per cent before the Fed’s September meeting, with March the first month for which traders price in at least even odds of a rate boost.
