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Morgan Stanley (MS) earnings 3Q 2020



Morgan Stanley beat analysts’ revenue and profit forecasts for the third quarter, fueled by better-than-expected results from Wall Street’s trading operations.

The bank said in a statement Thursday that earnings had jumped 25 percent a year earlier to $ 2.72 billion, or $ 1.66 a share, beating analysts polled by Refinitiv by $ 1.28. It generated revenue of $ 11.7 billion, up 16 percent from a year earlier and $ 1 billion more than forecast.

Morgan Stanley, which is Wall Street̵

7;s most aggressive buyer with a $ 20 billion takeover this year, appears to be firing on all cylinders. The company’s traders outperformed, generating $ 400 million more revenue than analysts expected, mainly from bond trading offices.

But the bank also topped forecasts in its wealth and investment management divisions, each leading to more than $ 200 million more revenue than expected.

“We delivered strong quarterly profits as markets remained active during the summer months, and our balanced business model continued to provide consistent, high returns,” CEO James Gorman said in a statement.

Despite the winning expectations, the company’s shares fell 1.4% in preliminary trading. Shares of Morgan Stanley were virtually unchanged until Wednesday this year, surpassing the 31% decline in the KBW Bank index.

During Gorman’s time, Morgan Stanley emphasized his wealth management unit, which takes advantage of growing markets as fees usually rise along with managed assets. He has redoubled his efforts to divert Morgan Stanley’s traditional trading and investment banking strengths.

Last week, he announced that his bank was acquiring Eaton Vance for $ 7 billion, adding weight and scale to the bank’s smallest of the three core businesses, investment management. In February, it announced the takeover of $ 13 billion in discount brokerage E-Trade.

Analysts had high expectations for the company’s trading operations after JPMorgan Chase and Goldman Sachs exceeded forecasts for better-than-expected market revenues.

Morgan Stanley is the last of the six largest US banks to report third-quarter earnings. JPMorgan, Goldman Sachs and Citigroup beat analysts’ expectations for profit as they set aside smaller provisions for loan losses. Bank of America and Wells Fargo disappointed as firms struggled with the impact of lower interest rates.

Here’s how the company did:

Earnings: $ 1.66 per share, compared to a $ 1.28 valuation by analysts surveyed by Refinitiv.

Revenue: $ 11.7 billion versus $ 10.64 billion.

Wealth management: revenue of $ 4.66 billion versus an estimate of $ 4.45 billion from FactSet.

Investment management: revenue of $ 1.06 billion against an estimate of $ 856 million.

Trade: Earnings per share of $ 2.26 billion versus $ 2.19 billion, fixed income earnings of $ 1.92 billion versus $ 1.59 billion.

This story is evolving. Please check again for updates.


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