Morgan Stanley Earnings Cheat Sheet: Swing to a Profit

S&P 500 (NYSE:SPY) component Morgan Stanley (NYSE:MS) reported net income above Wall Street’s expectations for the third quarter. Morgan Stanley provides financial products and services to a group of clients and customers, including corporations, governments, financial institutions, and individuals.

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Morgan Stanley Earnings Cheat Sheet for the Third Quarter

Results: Net income for the investment brokerage rose to $2.2 billion ($1.15 per share) vs. a loss of $91 million (7 cents per share) in the same quarter a year earlier.

Revenue: Revenue rose 7% to $9.89 billion last quarter.

Actual vs. Wall St. Expectations: MS beat the mean analyst estimate of 34 cents per share. It beat the average revenue estimate of $7.56 billion.

Quoting Management: James P. Gorman, President and Chief Executive Officer, said, “Morgan Stanley effectively navigated turbulent markets while consolidating our market share gains with Institutional clients and demonstrating resilience across the Global Wealth Management business as evidenced by record net new assets flows since the formation of MSSB. The Firm delivered progress across many of our key initiatives, increasing client penetration in equity derivatives and interest rate products as well as achieving a significant milestone in the integration of MSSB with the initial roll out of our new technology platform. With our robust liquidity, diverse funding, strong capital and unique strategic partnership with MUFG, Morgan Stanley is well positioned to deliver for clients in the long term.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 25 cents in the second quarter, by 12 cents in the first quarter, and by 8 cents in the fourth quarter of the last fiscal year.

Last quarter’s profit increase breaks a streak of two consecutive quarters of year-over-year profit decreases. In the second quarter, net income fell 39.1% while the figure dropped in the first quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 58 cents a share to 44 cents over the last ninety days. Over the past sixty days, the average estimate for the fiscal year has reached 90 cents abs per share, a decline from $1.22.

Competitors to Watch: Goldman Sachs Group, Inc. (NYSE:GS), Citigroup Inc. (NYSE:C), Bank of America Corp. (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM), Deutsche Bank AG (NYSE:DB), UBS AG (NYSE:UBS), Mitsubishi UFJ Financial Group Inc (NYSE:MTU), Piper Jaffray Companies (NYSE:PJC), Jefferies Group, Inc. (NYSE:JEF), and General Electric Company (NYSE:GE).

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(Source: Xignite Financials)