Morgan Stanley beats earnings estimates with better-than-expected commercial and investment banking results
Morgan Stanley said Friday that first quarter earnings and sales exceeded expectations for more than expected trade and investment banking results.
The bank posted earnings of $ 4.1 billion, or $ 2.19 per share, more than double the profit of $ 1.7 billion for the same period last year. The company stated that adjusted earnings, excluding merger-related charges, were $ 2.22 per share. Analysts had expected USD 1.70.
Company-wide revenue rose 61% to a record $ 15.7 billion, beating analysts’ estimate by $ 1.6 billion. This was supported by robust revenues from the company’s trading and banking operations on Wall Street. The boom in SPAC issuance has resulted in a gold premium in equity capital market fees, and the trading posts have benefited from strong activity in the bond and equity markets.
Morgan Stanley’s Fixed Income Trading Desks posted revenue of $ 2.97 billion, nearly $ 850 million more than analysts’ forecast for the quarter on the back of strong credit trading results. Stock trading generated sales of $ 2.88 billion, or around $ 170 million more than estimated.
Investment banking revenue rose 128% to $ 2.61 billion, beating estimates by nearly $ 500 million.
CEO James Gorman announced deals worth $ 20 billion last year. This was the most aggressive takeover since the financial crisis. He spent $ 13 billion to acquire E-Trade to expand his reach with the wealthy and $ 7 billion to buy Eaton Vance to expand his investment management business. The acquisition of Eaton Vance was completed in the first quarter.
The bank announced that wealth management income rose 47% to $ 5.96 billion for the quarter, in line with analysts’ expectations.
Morgan Stanley is the last of the six largest US banks to post profits in the first quarter.
JPMorgan Chase, Bank of America, Wells Fargo and Citigroup all beat analysts’ expectations by releasing money previously earmarked for credit losses. Main competitor Goldman Sachs beat estimates for strong advisory and trading results.
Here’s what Wall Street expected:
Earnings: $ 1.70 per share, 68% higher than a year earlier, according to Refinitiv
Revenue: $ 14.1 billion, up 49% from a year earlier
This story evolves. Please try again.
Did you like this article?
For exclusive stock selection, investment ideas and CNBC Global Livestream
Sign up for CNBC Pro
Start your free trial now