After surprisingly strong earnings from Goldman Sachs (GS), Citigroup (C) and JPMorgan Chase (JPM), it shouldn’t come as much of a surprise that Morgan Stanley (MS) beat earnings forecasts too.
Getty Images The Wall Street Journal has the goods on Morgan Stanley’s earnings:
On a per-share basis, which reflects the payment of preferred dividends, Morgan Stanley’s profit was 94 cents, or 60 cents when stripping out accounting adjustments and adjusting for a tax benefit. Analysts polled by Thomson Reuters had expected adjusted earnings of 55 cents a share.
Revenue rose 1.1% to $8.61 billion. Revenue excluding accounting adjustments edged up 2.2% to $8.52 billion, coming in above analyst estimates for $8.19 billion.
Citigroup’s Keith Horowitz and Christopher Larmoyeux are anything but wowed by Morgan Stanley’s results:
Ex DVA, MS reported operating EPS of $0.91 vs our $0.54 estimate and consensus of $0.55. Relative to our estimate, the top-line came in 6c higher due to better than expected I-Banking. FICC trading was in-line while Equities were modestly higher. MS received a ~30c benefit from a lower tax rate which explained the majority of the 37c beat. GWM revenues were in-line as was the 21% PT margin. Overall comp ratios were also in-line with expectations.
With the majority of the revenue beat coming from a tax benefit and a beat in investment banking, which was largely expected given what competitors have reported, we expect only to see modest outperformance today.
Shares of Morgan Stanley have gained 1.3% to $32.91 at 9:56 a.m., while JPMorgan Chase has dropped 0.2% to $58.57, Goldman Sachs has advanced 0.2% to $170.77 and Citigroup is off 0.2% at $49.74.
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