Morgan Stanley (NYSE:MS) conveys third-quarter results that are way below expectations because of a decline in fixed-income trading revenue.
The investment bank endured instability in which hit investors in August that lead to a 15% drop in trading revenue.
Morgan Stanley, an investment bank that earns money through trading and corporate lending, earned $1.02 billion (48 cents a share) in the third-quarter, declining from $1.65 (59 cents a share) earned in the previous year. Revenue decreased from $7.8 billion from $8.9 billion earned last year.
The results are well below analyst expectations for earnings of $1.29 billion (63 cents a share, on revenue of $8.5 billion, according to data from FactSet.
Morgan Stanley’s shares dropped 5.3% to $32.15 a share on Monday.
The investment bank was hurt by unpredictable trading factors that turned off investors in August and September Goldman Sachs Group Inc. (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM) are other banks that also took a hit by the volatility last quarter.
Financial assets have taken several hits in recent months amongst worries of an economic slowdown in China and uncertainty of whether or not the US Federal Reserve will raise interest rates. It has caused a slowdown in trading activity in fixed-income and commodities.