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Morgan Stanley climbs after Q4 results beat forecasts
Morgan Stanley posted stronger-than-expected fourth quarter results as the performance of its wealth management arm more than offset weak results from fixed income sales and trading.
The lender and investment bank posted net income of $686m or 29 cents per share for the fourth quarter of 2017 on the back of a 5.5% rise in revenues to $9.5bn (consensus: ($9.2bn).
Commenting on the outlook, Morgan Stanley chief James P. Gorman said: "We enter 2018 with strong momentum aided by rising interest rates, tax reform and an evolving regulatory framework."
Excluding a net $990m charge provision linked to recent changes in US tax laws which cut the value of its deferred tax assets, diluted EPS came in at 84 cents (net income: $1.68bn).
That was ahead of the analyst consensus for 77 cents and the 74 cents earned during the comparable period one year ago.
By segments, lower results in fixed income sales and trading were the reason behind the drop in revenues at its Institutional Securities unit from $4.6bn in the year ago quarter to $4.5bn.
Lower results in rates and foreign exchange drove the drop in Fixed Income sales and trading revenues, from $1.5bn a year ago to $808m over the latest three-month stretch, Morgan Stanley said in a statement.
Revenues at its Wealth Management unit on the other hand improved from $3.99bn to $4.41bn, while at its Investment Management arm they rose from $500m to $637m.
Investment revenues also increased, gaining $200m to $213m.
During the fourth quarter, the lender's Value-at-Risk was $38m, down from $43m in the same quarter one year ago.
The lender's adjusted full-year return on equity stood at 9.4% and at 8.1% on an as reported basis.
As of 1236 GMT, shares of Morgan Stanley were trading 2.02% higher at $56.47.