Morgan Stanley beat third-quarter estimates as equities trading revenue rose 41% to $5.8 billion. Fixed income trading and investment banking fell short of expectations. Shares declined less than 1% in premarket trading.
Morgan Stanley beat third-quarter expectations, with earnings of $3.03 per share against a $2.91 LSEG estimate. Revenue came in at $20.34 billion, compared with the $19.95 billion analysts expected.
The company said profit climbed 6.5% to $4.91 billion. Revenue rose 12%. A year earlier, profit attributable to the bank was $4.61 billion, or $2.80 per share.
Equities trading beats the estimate by $909 million
The equities division posted a 41% increase in revenue to $5.8 billion, exceeding the StreetAccount estimate by about $909 million. Morgan Stanley cited strength across its equities products and regions, with Asia a source of particular strength.
According to Reuters, markets remained volatile because of the Federal Reserve's interest-rate decision and the US-Iran war. Reuters said the turbulence forced investors to realign their portfolios, which drove up trading volumes. It also reported that Goldman Sachs posted a similar jump in equities trading.
Fixed income and investment banking lag
However, other businesses fell short. Fixed income trading revenue fell 7% to $2.01 billion, driven by declines in credit and commodities, roughly $260 million below expectations.
Investment banking revenue edged 2% higher to $2.16 billion, about $110 million below expectations. The bank cited higher advisory revenue on more completed mergers, offset by declines in equity underwriting on lower IPOs and in fixed income underwriting.
Sources: CNBC, Investing.com
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