Morgan Stanley (NYSE: MS) reported Q4 EPS of $0.40, $0.18 worse than the analyst estimate of $0.48. Revenue for the quarter came in at $7.5 billion, ex-DVA, versus the consensus estimate of $8.08 billion.

Morgan Stanley reported operating income of $336 million, or $0.15 per diluted share, a year ago.

Fourth Quarter Business Overview

• Institutional Securities net revenues excluding DVA were $3.2 billion11 reflecting challenging market conditions in Fixed Income & Commodities sales and trading and the impact of implementing FVA, with continued strength in Equity sales and trading and Investment Banking.
• Wealth Management net revenues were $3.8 billion. The pre-tax margin was 19%, which included the impact of compensation expense deferral adjustments.3,12 Fee based asset flows for the quarter were a record $20.8 billion, with total client assets above $2.0 trillion at quarter end.
• Investment Management reported net revenues of $588 million with assets under management or supervision of $403 billion.

James P. Gorman, Chairman and Chief Executive Officer, said, “We finished 2014 in substantially better shape than we entered the year. We delivered strong results across several of our businesses, although overall performance was affected by the choppy market conditions of the fourth quarter. We also addressed a number of items that, while affecting our results in the short term, position us well in the years ahead. Entering 2015, we remain confident about our business mix, market position and the opportunities ahead of us.”

Compensation expense of $5.1 billion increased from $4.0 billion a year ago primarily driven by compensation expense adjustments of approximately $1.1 billion, representing approximately $756 million related to the reduction in the average deferral of discretionary incentive compensation awards for the 2014 performance year and $381 million for the acceleration of vesting for certain outstanding deferred cash-based incentive compensation awards.3 Non-compensation expenses of $2.8 billion decreased from $4.1 billion a year ago, primarily reflecting lower legal expenses.

For earnings history and earnings-related data on Morgan Stanley (MS) click here.