The rise tallies favorably against a fall of 6% of Goldman Sachs Group Inc’s (NYSE:GS) trading revenues in the second quarter. This included positive revenues of 6 cents per share from DVA. Excluding an accounting gain, profit was 79 cents a share, topping the 74-cent average estimate of 23 analysts surveyed by Bloomberg. The Zacks Consensus Estimate was 73 cents.
Advertisement
As of this writing, shares of Morgan Stanley were up 2.9% at $41.40 per share in premarket trading. The price reaction during the full trading session will give a better idea about how investors accepted the results. Fixed Income and Commodities posted revenues of $1.3 billion, an increase from last year’s $1 billion. The United Kingdom-based fund Wellcome Trust Ltd (The) As Trustee Of The Wellcome Trust revealed it had bought so far a stake worth about 5.21% of the active investment manager’s stock portfolio in Morgan Stanley. The company had revenue of $9.56 billion for the quarter.
Compensation costs represent 57% of total revenue, down from 58% last quarter and 59% a year ago, but still above the firm’s stated target of 55%.
Last quarter, Morgan Stanley beat on the top and bottom lines, and CEO James Gorman said it was “our strongest quarter in many years with improved performance across most areas of the firm”.
Morgan Stanley is the latest big bank to report quarterly earnings.
Equity sales and trading revenues were $2.3 billion, up from $1.8 billion a year ago. Wealth Management bank deposits were $132 billion as of Q2. The total amount of the transaction was worth $157,123, according to the disclosed information with the Securities and Exchange Commission in a Form 4 filing. Total client assets under management were $2 trillion. Net revenue was $751 million, an increase of 7% year over year. It’s $1.9 billion.
The Investment Management business recorded income of $220 million during the second quarter.
“The quarter (for Morgan Stanley) looked really good, uncomplicated and straightforward across all the board, which is what really stood out”, said Marian Kessler, co-portfolio manager of the Becker Value Equity Fund in Portland, Oregon, which manages about $US3.3 billion in assets.
Morgan Stanley ranked second globally after Goldman Sachs (GS) in advising on deals in the first half of 2015, according to Thomson Reuters data. This was part of the share buyback program announced by the company, under which shares worth up to $3.1 billion can be repurchased through the second quarter of 2016. The Funds sub-advisor is Morgan Stanley Investment Management Company.
Advertisement
Still, analysts continued to press Morgan Stanley about the growth of its fixed-income business as there were several reports during the last quarter that suggested the bank was ready to make a big push in trading. The company remains focused on diversifying its revenue base by expanding footprint in emerging economies.
