Morgan Stanley on Wednesday posted fourth-quarter revenue and income that exceeded analysts' expectations on robust buying and selling, funding ban
Morgan Stanley on Wednesday posted fourth-quarter revenue and income that exceeded analysts’ expectations on robust buying and selling, funding banking and wealth administration outcomes.
The agency reported a 51% improve in revenue to $3.39 billion, or $1.81 per share. When excluding $189 million in integration prices tied to final yr’s E-Commerce acquisition, revenue was $1.92 per share, in contrast with the $1.27 estimate of analysts surveyed by Refinitiv. Income of $13.64 billion was greater than $2 billion past the $11.54 billion estimate.
“The agency produced a really robust quarter and file full-year outcomes, with glorious efficiency throughout all three companies and geographies,” CEO James Gorman mentioned within the launch. “Our distinctive enterprise mannequin continues to serve us effectively as we additional execute on our long-term technique with the acquisitions of E*TRADE and Eaton Vance.”
Expectations have been excessive after sturdy buying and selling and funding banking outcomes at rivals Goldman Sachs and JPMorgan Chase helped drive earnings beats, and Morgan Stanley did not disappoint.
Funding banking generated $2.Three billion in income, half a billion {dollars} greater than the $1.81 billion estimate of analysts surveyed by FactSet. The outcomes have been pushed by inventory underwriting income that greater than doubled from a yr earlier on sturdy IPO and follow-on exercise.
Equities buying and selling produced $2.49 billion in income, $350 million greater than the $2.14 billion estimate. Fastened earnings buying and selling produced $1.66 billion, $200 million greater than analysts had anticipated.
The wealth administration division produced $5.68 billion in income, almost half a billion {dollars} greater than analysts had anticipated, because of larger asset ranges and larger fee-generating exercise, in addition to the influence of the E-Commerce deal.
Morgan Stanley has the largest wealth administration enterprise among the many six largest U.S. banks, operations that sometimes profit from rising markets. That enterprise is being bolstered by the financial institution’s $13 billion E-Commerce acquisition introduced a yr in the past, and the fourth quarter is the primary interval E-Commerce is built-in into the bigger enterprise.
Shares of the financial institution have been nearly unchanged after rising 1.9% in premarket buying and selling.
Gorman took a little bit of a victory lap in his annual replace to the agency’s strategic targets, laying out the case that his agency was at an inflection level. The subsequent decade will see a sustained, larger degree of revenues and returns than in earlier durations, because of good points in market share and Gorman’s acquisitions.
The agency saved its long-term objectives largely unchanged, saying that returns on tangible widespread fairness can be 17% or larger, fairly than the 15% to 17% vary given a yr earlier.
“We’re within the progress part of this firm for the following decade,” Gorman instructed analysts after the outcomes have been launched.
Morgan Stanley is the final of the large U.S. banks to report fourth-quarter earnings. JPMorgan and Goldman Sachs beat analysts’ expectations for income and revenue, helped by buying and selling, whereas Citigroup, Wells Fargo, and Financial institution of America upset on income as lending margins have been squeezed.
Shares of New York-based Morgan Stanley climbed 33% in 2020, besting the 4.3% decline of the KBW Financial institution Index.
Listed here are the numbers:
- Adjusted revenue of $1.92 per share vs $1.27 estimate of analysts surveyed by Refinitiv.
- Income of $13.64 billion vs $11.54 billion estimate.