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Morgan Stanley (MS) Q1 2024 earnings




Morgan Stanley (MS) Q1 2024 earnings

Morgan Stanley jumps on profit margin

Morgan Stanley posted results on Tuesday that beat analysts’ profit and revenue expectations, as wealth management, trading and investment banking beat expectations.

This is what the company reported:

  • Earnings: $2.02 per share, versus $1.66 expected by LSEG
  • Revenue: $15.14 billion, versus expected $14.41 billion

The bank said first-quarter profit rose 14% from a year earlier to $3.41 billion, or $2.02 per share, helped by rising results at each of its three major divisions. Revenue rose 4% to $15.14 billion.

The bank’s shares rose about 2.5%.

Asset management revenue rose 4.9% to $6.88 billion, beating StreetAccount estimates by $230 million, as rising markets helped boost fee income and offset a decline in interest income.

Equities trading revenue rose 4.1% to $2.84 billion, $160 million more than expected, thanks to derivatives volumes. Fixed income trading revenue fell 3.5% to $2.49 billion, but still exceeded expectations by $120 million.

Investment banking revenues rose 16% to $1.45 billion, beating estimates of $1.40 billion, as increases in debt and equity issuance offset lower takeover fees.

The company’s smallest division, investment management, was the only major business to underperform expectations. While revenue rose 6.8% to $1.38 billion, it was below the StreetAccount estimate of $1.43 billion.

CEO Ted Pick’s tenure got off to a bad start as high interest rates prompted the bank’s wealth management clients to move cash into higher-yielding securities. The bank’s shares are down nearly 7% this year before Tuesday.

But like rivals including Goldman Sachs And JPMorgan ChaseMorgan Stanley was helped by strong trading and investment banking results in the quarter.

Last week, JPMorgan, Wells Fargo and Citi Group each exceeded expectations for revenue and profit, a streak that Goldman continued on Monday bank of America on Tuesday.

Analysts questioned Pick about reports that there are multiple U.S. regulators to research Morgan Stanley because of possible shortcomings in the way it screens clients for its asset management division.

“We have been focused on our customer onboarding and monitoring processes for some time,” Pick said Tuesday. “We’ve spent several years of time, effort and money on it, and it’s still going on. We’ve been working on it and the costs associated with this are largely in the costs.”