Morgan Stanley MS earnings 1Q 2022

Morgan Stanley MS earnings 1Q 2022

Morgan Stanley on Thursday reported first-quarter earnings that surpassed Wall Avenue expectations, due to the financial institution’s strong income features from buying and selling.

Shares of the New York-based financial institution jumped greater than 2% in premarket buying and selling Thursday. This is how the numbers in contrast with Wall Avenue expectations:

  • Earnings: $2.02 a share, versus $1.68 a share estimate, based on Refinitiv
  • Income: $14.8 billion, versus $14.2 billion estimate, based on Refinitiv

The financial institution noticed stronger-than-expected revenues from fairness and stuck revenue buying and selling amid risky markets and better accomplished M&A transactions.

Morgan Stanley’s fairness buying and selling income got here in at $3.2 billion, larger than an expectation of $2.7 billion, based on StreetAccount. Mounted revenue income totaled $2.9 billion for the quarter, topping estimate of $2.2 billion from StreetAccount.

“The Firm delivered a strong ROTCE of 20% in the face of market volatility and economic uncertainty, demonstrating the resilience of our global diversified business,” James Gorman, chairman and CEO, mentioned in an announcement.

“Institutional Securities navigated volatility on behalf of clients extraordinarily well, Wealth Management’s margin proved resilient and the business added $142 billion net new assets in the quarter, and Investment Management benefited from its diversification,” Gorman mentioned. “The quarter’s results affirm our sustainable business model is well positioned to drive growth over the long term.”

Whereas Morgan Stanley’s headline numbers exceeded expectations, the financial institution nonetheless skilled a slowdown in some components of the enterprise in comparison with a yr in the past. Web revenue of $3.7 billion, or $2.02 per share, was almost 8% decrease than the $4.1 billion, or $2.19 per share, it earned a yr in the past

Wall Avenue banks are grappling with a sudden slowdown in mergers-related advisory charges and a pointy drop in IPO exercise within the first quarter, a reversal of the increase that fueled final yr’s sturdy outcomes. The change was triggered by inventory market declines and Russia’s invasion of Ukraine, forces that made markets much less hospitable for offers and public listings.

The supply of the opposite half of Morgan Stanley’s income, the financial institution’s large wealth administration and funding administration divisions, did not maintain up as properly.

Its income from wealth administration totaled $5.9 billion, flat from a yr in the past however lacking an estimate of $6.2 billion, based on StreetAccount.

Morgan Stanley’s funding banking income additionally disillusioned, coming in at $1.6 billion, marking a 37% lower from yr in the past and decrease than a $1.8 billion estimate per StreetAccount. The slowdown was because of a big lower in fairness underwriting revenues, the financial institution mentioned.

— CNBC’s Hugh Son contributed reporting.

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