Morgan Stanley shares climb after beating estimates on wealth management, trading

Morgan Stanley is the last of the six largest U.S. banks to report first-quarter earnings. Read more...

Morgan Stanley posted profit and revenue that exceeded analysts’ expectations on better-than-expected results in wealth management and fixed-income trading.

The bank generated $2.4 billion in first-quarter profit, or $1.39 per share, according to a Wednesday release, compared with the $1.17 estimate of analysts surveyed by Refinitiv. Morgan Stanley’s revenues of $10.3 billion beat the $9.94 billion estimate. Shares advanced 3.3% in premarket trading at 7:27 a.m.

“We delivered solid earnings despite a slow start to the year following the turbulent markets in the fourth quarter,” CEO James Gorman said in the release. “Even though risks to the global environment remain, markets have recovered and we are well positioned to serve our clients and invest in our businesses.”

Under Gorman, Morgan Stanley has emphasized its wealth management division, a far steadier business than its trading operations. But Morgan Stanley still has a sizable Wall Street trading and advisory business, and that was expected to weigh on results as it did at rivals including Goldman Sachs. Morgan Stanley has the biggest stock-trading business among U.S. investment banks.

Last month, Gorman’s second-in-command, Colm Kelleher, announced plans to retire in June. The move will leave the position of president at Morgan Stanley vacant, setting up a contest among executives who want to someday succeed Gorman.

Morgan Stanley is the last of the six largest U.S. banks to report first quarter earnings. J.P. Morgan Chase and Bank of America posted record profits on the strength of their consumer-banking operations, while Wells Fargo and Citigroup posted mixed results.

Here’s what Wall Street expected:
Earnings: $1.17 per share, 20% lower than a year earlier, according to Refinitiv
Revenue: $9.94 billion, 10% lower than a year earlier
Wealth management: $4.19 billion, according to FactSet
Trading: equities $2.11 billion, fixed Income $782.3 million

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