Morgan Stanley Beats Profit Forecasts, Helped by Trading


Investment bank Morgan Stanley said its fourth-quarter profits jumped 83 percent from a year earlier, helped by strong results in its stock and bond trading business.

Morgan Stanley said Tuesday it earned $1.67 billion in the fourth quarter, or 81 cents per share, compared with $908 million, or 43 cents per share, in the same period a year ago. The results easily beat analysts’ expectations of 65 cents per share.

The Wall Street bank’s trading desks had a blockbuster quarter, benefiting heavily from the rally in U.S. markets following the U.S. presidential election. Morgan Stanley’s institutional securities division, which includes its investment bank and trading operations, reported a pre-tax profit of $1.3 billion compared with $672 million in the same period a year earlier.

Fixed income sales and trading had revenues of $1.5 billion, almost triple the revenues of $550 million a year earlier. Stock trading also did well, reporting revenues of $2 billion compared with $1.8 billion a year earlier.

Morgan Stanley’s wealth management business also had a solid quarter, reporting pre-tax income of $891 million versus $768 million in the same period a year earlier.

The investment bank posted revenue of $10.01 billion in the period. Its adjusted revenue was $9.02 billion, also beating Street forecasts. Three analysts surveyed by Zacks expected $8.49 billion.

Morgan Stanley shares have increased nearly 4 percent since the beginning of the year, while the Standard & Poor’s 500 index has climbed nearly 2 percent. The stock has risen 61 percent in the last 12 months.