James Gorman, CEO of Morgan Stanley, speaks during a Bloomberg Television interview on the third day of the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, January 24, 2019.
Simon Dawson | Bloomberg | Getty Images
Morgan Stanley exceeded expectations for third quarter earnings and revenue as the company posted record results in investment banking and wealth management.
Here are the numbers:
Earnings: $ 1.98 per share versus the estimate of $ 1.68 per share by analysts surveyed by Refinitiv
Revenue: $ 14.75 billion versus an estimate of $ 14 billion
“The company delivered another very strong quarter of robust revenues and improved efficiencies,” said CEO James Gorman in the press release. “We had an outstanding performance from our integrated investment bank and a record $ 135 billion in wealth management.”
Revenue and net income rose more than 25% year over year, aided by the acquisitions of E-Trade and Eaton Vance by CEO James Gorman, which strengthened the company’s wealth and asset management departments.
While competing banks reported a slowdown in bond trading revenues in the third quarter, Morgan Stanley’s strength traditionally lies in its stocks business, the largest in the world.
Revenue from stock trading increased 24% year over year to $ 2.88 billion, beating estimate by more than $ 500 million. Fixed income revenue declined 16% to $ 1.64 billion, beating the estimate of $ 1.53 billion.
Another thriving area is investment banking, which is being driven by robust mergers and initial public offerings, and Morgan Stanley is a top player there too. Rival advisor JPMorgan Chase posted record investment banking fees in the third quarter.
Morgan Stanley’s investment banking franchise was successful in the quarter, posting revenue up 67% to a record $ 2.85 billion.
The bank’s share rose 44% ahead of Thursday this year, outperforming the KBW Bank Index’s 36% increase.
JPMorgan exceeded expectations on Wednesday, aided by a $ 1.5 billion surge on better-than-expected credit losses. Bank of America released results Thursday that exceeded analysts’ expectations as it benefited from better-than-expected credit losses and record advisory and asset management fees.
This story evolves. Please check again for updates.
Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign in to start one Try it for free today.