Morgan Stanley Earnings Cheat Sheet: Two Straight Quarters of Profit Broken by a Loss

S&P 500 (NYSE:SPY) component Morgan Stanley (NYSE:MS) reported its results for the second quarter. Morgan Stanley provides its 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 Second Quarter

Results: Swung to a loss of $558 million (38 cents per diluted share) in the quarter. The investment brokerage had net income of $1.96 billion or $1.09 per share in the year earlier quarter.

Revenue: Revenue was $9.28 billion last quarter.

Actual vs. Wall St. Expectations: MS beat the mean analyst estimate of a loss of 63 cents per share. It beat the average revenue estimate of $8.04 billion.

Quoting Management: James P. Gorman, President and Chief Executive Officer, said, “While global markets remained challenging this quarter, the Firm delivered higher year-over-year revenues across our three major business segments. Within Institutional Securities, our premier investment-banking franchise ranked #1 in global completed M&A during the quarter and had the highest second-quarter revenues since 2007. Equities achieved further client gains as revenues rose despite a fall in overall market volumes, while Fixed Income showed continued progress and Wealth Management delivered its highest revenues and FA productivity since the MSSB joint venture was formed and had positive flows, as did Asset Management. With respect to costs, our re-engineering initiative and additional expense management efforts underscore our focus to ensure that shareholders benefit from our progress. We also completed the previously announced preferred stock conversion with MUFG, resulting in a one-time, non-cash charge this quarter but removing a significant yearly dividend payment and boosting the Firm’s Tier one common ratio to an industry-leading level. With this additional capital cushion and the clear momentum across our main businesses, we are well positioned to help our clients navigate the constantly changing markets and create additional value for our shareholders.”

Key Stats:

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

MS’ loss in the latest quarter follows profits in the previous three quarters. The company reported a profit of $968 million in the first quarter, a profit of $836 million in the fourth quarter of the last fiscal year and $131 million in the third of the last fiscal year.

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)