Morgan Stanley beats estimates on strong equity trading

Investing.com -- Morgan Stanley (NYSE: MS) reported third-quarter earnings that exceeded analyst expectations, with shares up around 0.7% premarket following the release.

Adjusted earnings per share of $3.03 beat the consensus estimate of $2.94. Revenue reached $20.3 billion, surpassing the $20.0 billion analyst estimate and marking a 12% increase from $18.2 billion in the same quarter last year.

The firm's Institutional Securities division drove the strong performance, with equity trading revenues surging 41% YoY to $5.8 billion, benefiting from client engagement and strength in Asia. Wealth Management delivered record revenues of $9.1 billion, up 10% YoY, attracting $232 billion in net new assets and $80 billion in fee-based flows during the quarter. Investment Banking revenues rose 2% to $2.2 billion, supported by higher completed M&A activity in the Americas.

"Morgan Stanley reported another strong quarter with net revenues of $20.3 billion, EPS of $3.03 and a ROTCE of 22.6%," said Ted Pick, Chairman and Chief Executive Officer. "The Integrated Firm is connecting the full breadth of Morgan Stanley to deliver differentiated solutions and advice for our clients."

Net income applicable to Morgan Stanley was $4.9 billion, compared with $4.6 billion a year ago. The firm achieved a return on tangible common equity of 22.6% and maintained an expense efficiency ratio of 67%.

Fixed Income trading revenues declined 7% to $2.0 billion, primarily due to declines in credit and commodities. Investment Management reported revenues of $1.5 billion, down 12% YoY, driven by a reversal of accrued carried interest related to certain investments in one of its private funds.

The firm's Standardized Common Equity Tier 1 capital ratio stood at 14.9%.

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