Earnings per share (EPS) fell to 55 cents in the quarter ended 31 March, from $1.18 per share a year earlier. Analysts had on average pencilled in earnings of 46 cents per share, according to a Thomson Reuters poll.
Shares in the bank tracked higher by around two per cent in pre-market trading, though they were still down around 19 per cent from the beginning of the year.
The bank reported revenues of $7.8bn (£5.5bn), compared with $9.9bn a year ago.
Revenue at the banks fixed income and commodities trading business sunk to $873m, from $1.9bn a year ago blamed on low energy prices and the disposition of its oil selling business in the fourth quarter of 2015.
James Gorman, chairman and chief executive, said:
The first quarter was characterised by challenging market conditions and muted client activity. Against that backdrop, our businesses delivered stable results. While we see some signs of market recovery, global uncertainties continue to weigh on investor activity.
Morgan Stanley shares have recovered from lows in February this year, when a global banking sell-off pushed markets into bear territory due to concerns over long term profitability.
Shares in other US banking giants have also sharply fallen so far this year.
Bank of America is down by 17 per cent, Citigroup is 13 per cent lower, while JPMorgan Chase, and US Bancorp shares have fallen by six and four per cent respectively.
Lower results have been put down to commodity and oil prices failing to recover, the continued slowdown in China and emerging markets, interest rates in the US missing increased targets and remaining at record lows elsewhere, ever climbing regulatory costs, and burdensome capital requirements.
Read more: The banks which pay the biggest bonuses
Provisions for loans to the energy industry have also dragged on bank's balance sheets. JP Morgan revealed last week it was setting aside a huge amount to cover bad loans.
Goldman Sachs, Morgan Stanley's traditional rival, will report its first quarter earnings tomorrow before the US market open.
Analysts are looking for earnings per share of $2.45 on revenue of $6.76bn. Bloomberg has reported in the last four weeks, 22 Wall Street analysts brought their expectations down by around 22 per cent, or $0.94, from Goldman’s EPS estimates. This could mean we're in for another set of forecast beating results tomorrow.