James Gorman, president and CEO of Morgan Stanley, speaks during a Bloomberg Television interview in Beijing, China, on Thursday, May 30, 2019.
Giulia Marchi | Bloomberg | Getty Images
Morgan Stanley on Wednesday posted fourth-quarter earnings and earnings that exceeded analysts ’expectations of strong trading results, investment banking and wealth management.
The firm reported a 51% increase in profit, to $ 3.39 million, or $ 1.81 per share, compared to the $ 1.27 estimate by analysts surveyed by Refinitiv. Revenue of $ 13.644 billion exceeded $ 2 billion beyond the $ 11.544 billion estimate.
“The company produced a very strong quarter and recorded full-year results, with excellent performance in all three companies and geographic areas,” CEO James Gorman said in the statement. “Our unique business model continues to serve us as we execute our long-term strategy with the acquisitions of E * TRADE and Eaton Vance.”
The bank’s shares appeared 1.75% in pre-market trading.
Expectations were high after solid trading and banking investment results from rivals Goldman Sachs and JPMorgan Chase contributed to earnings gains, and Morgan Stanley did not disappoint.
Investment banking generated $ 2.3 billion in revenue, half a million dollars more than the $ 1.81 million estimate by analysts surveyed by FactSet, driven by stock subscription revenue that doubled in more than a year before by a solid IPO and monitoring activity.
Equity trading generated revenue of $ 2.49 million, $ 350 million more than the estimated $ 2,144 million. Fixed-income trading produced $ 1.65 billion, 200 million more than analysts had expected.
The company’s wealth management division generated $ 5.688 billion in revenue, nearly half a million dollars more than analysts had predicted, thanks to higher asset levels and higher commission-generating activity, as well as to the impact of the e-commerce agreement.
Morgan Stanley has the largest wealth management business among the six largest banks in the United States, operations that typically benefit from rising markets. This business is bolstered by the bank’s $ 13 billion e-commerce acquisition announced a year ago, and the fourth quarter is the first period that E-Trade has integrated into the largest company.
$ 1.1 billion in investment management revenue removed analysts ’estimate of $ 1.02 billion.
Morgan Stanley is the latest of the major U.S. banks to report fourth-quarter earnings. JPMorgan and Goldman Sachs exceeded revenue expectations and earnings from analysts, aided by trade, while Citigroup, Wells Fargo and Bank of America disappointed revenue as loan margins narrowed.
Shares of New York-based Morgan Stanley rose 33% in 2020, surpassing the 4.3% decline in the KBW Bank index.
Here are the numbers:
Earnings of $ 1.81 per share compared to $ 1.27 estimated by analysts surveyed by Refinitiv.
Revenue of $ 13.644 billion compared to the estimate of $ 11.54 million.
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