Morgan Stanley Earnings: Here’s Why the Stock is Down Now

Morgan Stanley (NYSE:MS) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 0.33%.

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Morgan Stanley Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $0.61 in the quarter versus EPS of $-0.06 in the year-earlier quarter.

Revenue: Decreased 4.43% to $8.16 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Morgan Stanley reported adjusted EPS income of $0.61 per share. By that measure, the company beat the mean analyst estimate of $0.57. It missed the average revenue estimate of $8.35 billion.

Quoting Management: James P. Gorman, Chairman and Chief Executive Officer, said, Morgan Stanley demonstrated solid momentum across the Firm this quarter, consistent with the strategic objectives we laid out at the beginning of the year. In Global Wealth Management, our operating pre-tax profit was the highest in our history, and we look forward to completing the acquisition of the remaining 35% of our wealth management joint venture once we have obtained full regulatory approval. Our institutional businesses continue to rebound from the lows of 2012. The program to reduce non-strategic risk-weighted assets in our Fixed Income and Commodities businesses remains on schedule. Our joint ventures with Mitsubishi UFJ Financial Group present exciting opportunities across the globe and specifically in Japan, given the economic policy changes taking place in that country. Looking forward, while the global environment continues to have moments of fragility, we believe the broad economic outlook for the next several years is stronger than in the recent past.

Key Stats (on next page)…

Revenue decreased 0.97% from $8.24 billion in the previous quarter. EPS increased 35.56% from $0.45 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.50 to a profit $0.51. For the current year, the average estimate has moved up from a profit of $2.00 to a profit of $2.09 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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