Morgan Stanley Reports Second Quarter Results
Wednesday June 18, 8:00 am ET
Net Revenues of $6.5 Billion
Quarterly EPS of $0.95
Annualized ROE of 12%
NEW YORK--(BUSINESS WIRE)--Morgan Stanley (NYSE: MS - News) today reported income from continuing operations for the second quarter ended May 31, 2008 of $1,026 million, or $0.95 per diluted share, compared with $2,363 million, or $2.24 per diluted share, in the second quarter of last year. Net revenues were $6.5 billion, 38 percent below last year’s second quarter. Non-interest expenses of $5.1 billion, including severance expense of approximately $245 million related to staff reductions1, decreased 28 percent from a year ago. The annualized return on average common equity from continuing operations was 12.3 percent in the current quarter, compared with 29.4 percent in the prior year.
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The quarterly results from continuing operations include pre-tax income from two previously disclosed divestitures: $698 million related to the sale of Morgan Stanley Wealth Management S.V., S.A.U. (“MSWM S.V.”), the Spanish onshore mass affluent wealth management business, reported in the Global Wealth Management Group business segment; and $732 million related to the secondary offering of MSCI Inc. reported in the Institutional Securities business segment.2
For the first six months of fiscal 2008, income from continuing operations was $2,577 million, a 45 percent decrease from $4,677 million a year ago. Diluted earnings per share from continuing operations were $2.40 compared with $4.41 last year. Net revenues decreased 28 percent to $14.8 billion and non-interest expenses decreased 17 percent to $11.2 billion. The annualized return on average common equity from continuing operations was 15.9 percent, compared with 30.1 percent a year ago.
Net income for the quarter was $1,026 million, a decrease of 60 percent from $2,582 million in the second quarter of fiscal 2007. For the first six months of fiscal 2008, net income was $2,577 million, a 51 percent decrease from $5,254 million a year ago. Net income for the first six months of fiscal 2007 includes the results of Discover Financial Services which are reported in discontinued operations. Diluted earnings per share were $0.95 for the quarter, compared with $2.45 in the second quarter of fiscal 2007, and the annualized return on average common equity for the second quarter was 12.3 percent compared with 27.4 percent a year ago. For the first six months, diluted earnings per share were $2.40, compared with $4.96 a year ago, and the annualized return on average common equity was 15.9 percent compared with 28.7 percent last year.
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