Morgan Stanley shares up on Q4 beat

Morgan Stanley (NYSE: MS) reported its fourth quarter financial results and beat estimates in both revenue and earnings, sending shares up 1.2 percent during Thursday’s premarket hours.

For the fourth quarter, Morgan Stanley reported revenue of $9.5 billion compared to $9.0 billion a year ago, and beating Thomson Reuters analysts’ estimates of $9.2 billion. The firm reported an adjusted EPS of $0.84, beating Thomson Reuters analysts’ estimates of $0.77.

In the fourth quarter, Morgan Stanley reported a tax charge of $990 million due to the tax reform passed recently by the Trump Administration. The tax bill slashed corporate tax rates from approximately 35 percent down to 21 percent. Morgan Stanley along with its other competitors all took billions and billions of dollars in charges due to the bill.

Morgan Stanley’s institutional securities reported revenue of $4.5 billion, reflecting both strong underwriting and equity sales and trading along with lower results in fixed income sales and trading. Wealth management business reported revenues of $4.4 billion, beating StreetAccount’s forecast of $4.3 billion.

For the full year, Morgan Stanley reported net revenue of $37.9 billion on an adjusted EPS of $3.60, excluding the tax charge. The firm reported 9.4 percent on its full year return on equity, excluding the impact of the charge.

“We enter 2018 with strong momentum aided by rising interest rates, tax reform and an evolving regulatory framework.” said James Gorman, Chairman and Chief Executive Officer of Morgan Stanley.

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