The bank said in a release Thursday that profit rose 25% from a year earlier to $ 2.72 billion, or $ 1.66 a share, higher than analysts’ estimates of $ 1.28 surveyed by Refinitive. It generated revenue of $ 11.7 billion, 16% more than a year ago and a billion dollars more than estimates.
Morgan Stanley, who was Wall Street’s most aggressive acquaintance with this year’s $ 20 billion in acquisitions, appeared to be firing on all cylinders. Traders at the firm led the result, generating $ 400 million more than the revenue expected by analysts, mostly driven by bond trading desks.
But the bank has also topped estimates in its wealth management and investment management divisions, each generating more than $ 200 million in revenue.
During the release, CEO James Gorman stated, “We delivered strong quarterly earnings, as the market remained active during the summer months and our balanced business model continued to deliver consistent, high returns.”
Despite beating expectations, the firm’s shares dipped 1.4% in premarket trading. Shares of Morgan Stanley are nearly unchanged since Wednesday of this year, with the KBW Bank Index declining 31%.
Under Gorman, Morgan Stanley has emphasized its wealth management division, which benefits from growing markets as fees typically climb with assets under management. He has doubled on his push to diversify away from Morgan Stanley’s traditional strengths trading and investment banking.
Last week he announced that his bank was acquiring Eaton Vaughan for $ 7 billion, adding to the bank’s three core businesses, the smallest and large scale in investment management. In February, he announced a $ 13 billion acquisition of discount brokerage E-Trade.
Both JPMorgan Chase and Goldman Sachs have beaten projections on revenue for better-than-expected markets, after which analysts had high expectations for the firm’s business operations.
Morgan Stanley is the last of the six largest US banks reporting third-quarter earnings. JPMorgan, Goldman Sachs and Citigroup meet analysts’ expectations of profitability as they set aside loan-loss provisions. Bank of America and Wells Fargo were disappointed as firms struggled with the impact of lower interest rates.
Here’s how the company did:
Earnings: $ 1.66 per share, vs. $ 1.28 estimates by analysts surveyed by Refinitiv.
Revenue: $ 11.7 billion, versus an estimate of $ 10.64 billion.
Wealth Management: 4.66 billion in revenue vs. $ 4.45 billion from FactSet.
Investment Management: $ 1.06 billion revenue vs. $ 856 million estimate.
Trading: Equity revenue of $ 2.26 billion vs. $ 2.19 billion estimate, $ 1.92 billion of fixed income revenue of $ 1.59 billion estimate.
This story is developing. Please check back for updates.
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