Morgan Stanley Earnings Beat Estimates

Morgan Stanley (NYSE:MS) joined its Wall Street peers by reporting a better-than-expected profit on Wednesday, thanks to a surge in trading revenue.

The New York-based firm said net income rose 57 percent to $1.6 billion, or 81 cents a share, in the third quarter, compared with $1.02 billion, or 48 cents, a year earlier. The result beat analysts’ estimates. Analysts from The Wall Street had expected the company to earn 63 cents.

Revenue rose 15 percent to $8.91 billion, compared with revenue of $7.77 billion a year earlier. Analysts had expected the company to report revenue of $8.17 billion.

The better-than-expected was boosted by a surge in trading revenue. Revenue from fixed-income trading, surged 61 percent to $1.5 billion, beating analysts’ estimates of $1 billion. Equity trading edged up 0.7 percent to $1.9 billion, compared with the estimate of $1.83 billion.

“Fixed income was quite strong this quarter,” Chief Financial Officer Jonathan Pruzan said in an interview. “It was a better trading environment for us, particularly given our skew toward credit. The credit environment was quite good in terms of tightening spreads”

Morgan Stanley is the last big banks to report third-quarter earnings. Rivals all posted strong results in fixed-income trading and investment banking businesses.

“This quarter we saw record revenues in wealth management and a strong performance in our sales and trading business. While the environment was more challenging for our equity underwriting and asset management businesses, our expense initiatives remain on track,” Morgan Stanley CEO James Gorman said in a statement. “Overall the results reflect steady progress against our long term strategic goals.”

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