Morgan Stanley (NYSE: MS) on Monday reported quarterly earning that beats analysts’ estimate, as the cost cut offset the decline in revenue from fixed-income and equities trading.
The company said that net income fell 53 percent to $1.13 billion, or 55 cents a share in the first quarter, compared with $2.39 billion or $1.18 a share a year earlier. Analysts had projected earnings of 46 cents per share for the period ended March 31.
Revenue in the first quarter tumbled to $7.79 billion, fell short of analysts’ estimate of $7.87 billion. Trading revenue fell 34% to $2.69 billion from $4.08 billion. Debt, currencies and commodities trading revenue fell 56% to $873 million, and the revenue from equity trading dropped 10% to $2.06 billion.
The huge drop in revenue was due to the volatile markets in the early year. But the bank lower expenses to compensate for the falling revenue. Non-interest expenses fell 14 percent to $6.05 billion. Compensation expense dropped 19 percent to $3.68 billion and non-compensation costs declined 6.2 percent to $2.37 billion.
“If these markets were to continue as is, our goals will be extremely difficult to achieve, and we would therefore take additional appropriate actions,” Chief Executive Officer James Gorman said in a conference call with analysts.
Other big banks also had similar situation. Wells Fargo, Bank of America, JPMorgan Chase and Citigroup all reported their earning results that top analysts estimates while their revenue also fell sharply. Goldman Sachs Group will reports results on Tuesday.
Morgan Stanley shares fell 0.27 percent to $25.70 at 11:24 A.M. in New York.