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Morgan Stanley MS earnings in the first quarter of 2022

A screen shows Morgan Stanley’s trading information on the New York Stock Exchange (NYSE) floor on January 19, 2022.

Brendan McDermid | Reuters

Morgan Stanley on Thursday reported first-quarter earnings that exceeded Wall Street expectations, thanks to the bank’s strong earnings from trading.

Shares of the New York bank rose 0.8% on Thursday.

Here’s what the company expects from Wall Street, based on a survey of analysts by Refinitiv:

  • Earnings per share: $ 2.02 vs. $ 1.68 is expected
  • Revenue: $ 14.8 billion vs. $ 14.2 billion was expected

The bank had higher-than-expected revenues from equity and fixed income trading, among volatile markets and higher M&A transactions.

Morgan Stanley’s capital trading revenue was $ 3.2 billion, higher than the $ 2.7 billion expectation, according to StreetAccount. Fixed income was $ 2.9 billion in the quarter, surpassing StreetAccount’s $ 2.2 billion estimate.

“The company gave a strong ROTCE [return on average tangible common shareholder’s equity] In the face of the volatility and economic uncertainty of the 20% market, it shows the resilience of our global diversified business, ”President and CEO James Gorman said in a statement.

“Corporate Securities navigated volatility very well on behalf of clients, was a resilient margin in Wealth Management, and the business added $ 142 billion in new assets in the quarter, and Investment Management benefited from its diversification,” Gorman said. “The quarterly results confirm that our sustainable business model is well positioned to drive long-term growth.”

Although Morgan Stanley’s numbers exceeded expectations, the bank still slowed in some parts of the business compared to a year ago. He reported a year ago that $ 3.7 billion, or $ 2.02 per share, was almost 8% lower than $ 4.1 billion, or $ 2.19 per share.

Wall Street banks are experiencing a sharp slowdown in merger-related advisory fees and a sharp drop in IPO activity in the first quarter, a return to the boom that pushed strong results last year. The change was caused by the collapse of the stock market and the invasion of Ukraine by Russia, the markets became unfriendly to agreements and public quotes.

The other half of Morgan Stanley’s sources of revenue, the bank’s wealth management division and its huge investment management division, did not hold up.

Wealth management revenue was $ 5.9 billion, the same as a year ago and missing an estimate of $ 6.2 billion, according to StreetAccount.

Morgan Stanley’s investment bank revenue was also disappointed, hitting $ 1.6 billion, down 37% from a year ago and less than the estimated $ 1.8 billion per StreetAccount. The slowdown was due to a significant reduction in revenue from equity services, the bank said.

Read the full earnings statement here.

– CNBC’s Hugh Son contributed to the report.

Morgan Stanley MS earnings in the first quarter of 2022

Source link Morgan Stanley MS earnings in the first quarter of 2022

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