Morgan Stanley beats expectations with first-quarter results as profits leap 71 per cent

William Turvill
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Morgan Stanley Reports Q2 Earnings More Than Double From Year Before
Morgan Stanley joined JP Morgan Chase, Citigroup and Bank of America in surpassing expectations in the first quarter (Source: Getty)

Morgan Stanley today became the latest big US bank to beat analysts’ expectations with its first-quarter results, with profits climbing more than 70 per cent.

The figures

The Wall Street lender’s revenue for the period was $9.7bn, up 24 per cent on $7.8bn in the same period last year and well ahead of the $9.3bn anticipated by analysts, according to a Yahoo Finance consensus poll.

Morgan Stanley’s net income was reported at $1.93bn, up 71 per cent on $1.13bn in the same period last year.

Read more: Goldman Sachs profits jump 80 per cent... shares dip three per cent

The bank’s earnings per share were expected to come in at $0.83, according to Yahoo Finance, but were today reported at $1.

After releasing its first-quarter earnings, Morgan Stanley’s shares jumped two per cent to $41.85 in pre-market trading.

Why it’s interesting

Morgan Stanley’s institutional securities division’s revenue rocketed 39 per cent during the period to $5.2bn.

Within this area of the business, investment banking revenues were up 41 per cent to $1.4bn and fixed income sales and trading net turnover hit $1.7bn, up from $873m last year.

Morgan Stanley has followed JP Morgan Chase, Citigroup and Bank of America in beating expectations with first-quarter results. The strong performances have generally been linked to the so-called Trump bump and higher interest rates.

Despite its profits jumping 80 per cent, Goldman Sachs missed analyst forecasts yesterday. Wells Fargo, which is recovering from an account-opening scandal, reported flat profits last week.

What the company said

Chief executive James Gorman:

We reported one of our strongest quarters in recent years. All our businesses performed well in improved market conditions. We are confident in our business model and the opportunities ahead, while recognising that the environment remains uncertain.