Morgan Stanley’s earnings rose 18 per cent, helped by M&A, trading; Beats analysts’ estimates


NEW YORK, N.Y. – Investment bank Morgan Stanley said Thursday that its first-quarter income rose 18 per cent from a year ago, helped by higher earnings in its trading and merger and acquisitions advisory businesses.

THE RESULTS: Morgan Stanley earned $1.39 billion, up from $1.18 billion in the same period a year ago. The figures exclude accounting adjustments related to the value of the bank’s debt. The earnings were equivalent to 68 cents per share. That easily beat the 61 cents per share analysts were expecting, according to FactSet, a financial data provider. Revenue from continuing operations was $8.8 billion.

GAINS ACROSS THE BOARD: All major segments of Morgan Stanley’s business increased. Institutional securities, the name of Morgan Stanley’s trading, M&A advisory and stock sales division, grew the most. That division earned $1.22 billion versus $1.11 billion a year ago. Wealth management, which includes Morgan Stanley Smith Barney, had pre-tax income of $691 million versus $597 million a year ago.

UNEXPECTED STRENGTH IN BONDS: The firm’s fixed-income and commodities division reported an unexpected rise in revenue this quarter, to $1.7 billion from $1.5 billion a year ago. Fixed income had been a difficult business for Morgan Stanley and the other banks recently. Goldman Sachs’ fixed-income, currency and commodities division reported an 11 per cent decline in profits this quarter compared to last year, while Citigroup reported an 18 per cent decline in fixed-income trading.

ADDING EMPLOYEES: Morgan Stanley said it had 55,883 employees in the first quarter, a modest increase from the 55,289 it reported a year ago.

BUYBACK AND DIVIDENDS: The firm also announced it would buy back $1 billion of its own stock as well as increase its quarterly dividend to 10 cents per share. Morgan Stanley’s stock rose 87 cents, or 2.9 per cent, to $30.76.

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