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Morgan Stanley Trounces Q4 Expectations on Strong Bond Trading

Stock MarketsJan 16, 2020 08:02AM ET
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© Reuters. Morgan Stanley Earnings, Revenue Beat in Q4 - Morgan Stanley (NYSE:MS) became the latest of Wall Street's bulge bracket to report fourth-quarter earnings sharply ahead of analysts' expectations, thanks to a bumper quarter for bond trading and underwriting.

The firm reported earnings per share of $1.2 on revenue of $10.86 billion. Analysts polled by expected EPS of $1.03 on revenue of $9.71 billion.

That was up from EPS of $0.73 on revenue of $8.55 billion in the same period a year earlier.

Net profit rose over 50% from a year earlier to $2.2 billion, even after a $172 million charge for restructuring costs as the bank cut positions at the end of the year. Net revenue from sales and trading rose 28% from the final quarter of 2018, due entirely to its fixed-income division. Equity sales revenues were flat on the year. Investment banking revenue jumped 11%.

“We delivered strong quarterly earnings across all of our businesses,” said chairman and chief executive officer James Gorman, noting that four straight quarters of revenue over $10 billion had made for a record year on both top and bottom lines.

Return on tangible common equity - a key measure of profitability - rose to 13.0% from 8.8% a year earlier, but was still below the 2019 average of 13.4%

Morgan Stanley follows other major Financial sector earnings this month

On Tuesday, JPMorgan reported fourth quarter EPS of $2.57 on revenue of $29.21B, compared to forecasts of EPS of $2.35 on revenue of $27.87B.

Bank of America earnings beat analysts' expectations on Wednesday, with fourth quarter EPS of $0.74 on revenue of $22.35B. analysts expected EPS of $0.69 on revenue of $22.22B

Stay up-to-date on all of the upcoming earnings reports by visiting's earnings calendar

Morgan Stanley Trounces Q4 Expectations on Strong Bond Trading

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