Morgan Stanley (MS) Q1 Profits Drop Sharply, But Beat Low Expectations

April 21, 2011 7:47 AM EDT
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Morgan Stanley (NYSE: MS) shares are trading nearly 4 percent higher in pre-market action following mixed first-quarter results.

The US investment bank issued net income of $966 million, or 50 cents per share, down about 46 percent from net income of $1.8 billion, or $1.03 per share, during the same quarter last year. Excluding a number of items, Morgan Stanley's adjusted earnings number came in at 46 cents per share. Analysts were expecting a quarterly profit of about 34 cents per share, with estiamtes coming down throughout the quarter.

Consolidated sales for the quarter came in at $7.64 billion, down about 16 percent from the $9.072 billion reported during the first quarter of last year, which fell short of the consensus of $7.89 billion. Revenue from the Institutional Securities unit fell 33 percent to $3.59 billion, sales from Global Wealth Management rose 11 percent to $3.44 billion and sales from the Asset Management unit were down about 4 percent to $626 million.

The bank's Tier 1 capital ratio, under Basel I, was approximately 16.7% and Tier 1 common ratio was approximately 11.8%.

Jim Gorman, President and CEO of Morgan Stanley said, "We continued to strengthen our client franchise and delivered solid results across many of our businesses. Our premier investment banking franchise remains a clear industry leader – maintaining our #1 ranking in global M&A in a robust deal market. We also made gains in key areas of focus – with our best results in equities since the financial crisis; significant improvement in fixed income and commodities from last quarter; and positive flows across wealth management and asset management. While the loss at our joint venture with MUFG is disappointing, we remain strongly committed to the Japanese market and our strategic partners at MUFG."

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