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Morgan Stanley Q3 Results Top Estimates

morganstanley oct17 lt

Morgan Stanley (MS) reported Thursday a profit for the third-quarter that increased 2 percent from last year, reflecting higher fixed income revenues. Quarterly revenues also rose 2 percent.

Both earnings per share and revenues topped analysts' expectations.

In the pre-market, MS is trading at $44.70, up $1.91 or 4.46 percent.

"We delivered strong quarterly earnings despite the typical summer slowdown and volatile markets. .... Our consistent performance shows the stability of our business model. We remain committed to controlling our expenses and are well positioned to pursue our growth initiatives," said James Gorman, Chairman and Chief Executive Officer.

The company's third-quarter earnings applicable to common shareholders rose 2 percent to $2.06 billion from last year's $2.02 billion, with earnings per share improving to $1.27 per share, from $1.17 per share in the prior year. Analysts polled by Thomson Reuters expected the company to report earnings of $1.11 per share for the third quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter grew 2 percent to $10.03 billion from $9.87 billion a year ago. Analysts expected revenue of $9.60 billion for the quarter.

Fixed Income sales and trading net revenues increased 21% from a year ago reflecting strong client activity in the credit and rates businesses, partially offset by a decline in foreign exchange.

Institutional Securities reported net revenues for the quarter of $5.0 billion up from $4.9 billion a year ago. Pre-tax income was $1.3 billion compared with $1.6 billion a year ago.

Wealth Management net revenues for the quarter of $4.4 billion were essentially unchanged from a year ago. Pre-tax income of $1.2 billion in the current quarter resulted in a pre-tax margin of 28.4%.

Investment Management's net revenues grew to $764 million from $653 million a year ago. Pre-tax income was $165 million compared with $102 million a year ago.

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