Morgan Stanley 1Q Beats Expectations
Wednesday March 19, 8:31 am ET
By Joe Bel Bruno, AP Business Writer
Morgan Stanley 1st-Qtr Results Above Expectations on Strong Equities, Fixed-Income Trading
NEW YORK (AP) -- Morgan Stanley, one of the world's biggest investment banks, on Wednesday reported strong stock and bond trading pushed first-quarter above Wall Street projections.
The company reported a profit of $1.53 billion after preferred dividends, or $1.45 per share, up from $2.66 billion, or $2.17 per share, in the year-ago period. Revenue fell 17 percent to $8.3 billion from $10 billion a year earlier.
Results easily topped analysts' expectations for a profit of $1.03 per share on $7.19 billion of revenue, according to Thomson Financial.
John Mack, Morgan Stanley's chairman and chief executive, said the investment house known for its trading prowess "effectively capitalized on market opportunities and aggressively managed our positions." The results follow better-than-expected earnings from rivals Lehman Brothers Holdings Inc. and Goldman Sachs Group Inc.
"While many of our businesses are facing challenging market conditions that we expect to continue in the months ahead, we are satisfied with how Morgan Stanley navigated the ongoing market turbulence," he said in a statement.
However, Morgan Stanley -- like its two rivals on Tuesday -- did show vulnerability to the ongoing credit crisis. It reported writedowns of $2.3 billion -- $1.2 billion from mortgage securities and $1.1 billion from loans.
It also posted a pretax loss of $161 million in its asset management business from securities issued by off-balance sheet structured investment vehicles.
Shares rose 5.9 percent to $45.40 in premarket trading from a $42.86 close Tuesday.