Does This Feel Like a Record Quarter for Morgan Stanley?

By Chris Lange Updated Jan 12, 12:50AM EST · Published Apr 18, 8:29AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Does This Feel Like a Record Quarter for Morgan Stanley? — © Wikimedia Commons

Morgan Stanley (NYSE: MS) released its first-quarter earnings report before the markets opened on Wednesday. The investment bank said that it had $1.45 in earnings per share (EPS) on $11.1 billion in revenue, which compares with consensus estimates from Thomson Reuters of $1.25 in EPS on revenue of $10.32 billion. The same period of last year reportedly had EPS of $1.00 and $9.74 billion in revenue.

During the quarter, Morgan Stanley reported a record profit, helped by a lower tax bill and a boost in revenue from last quarter’s volatile markets.

In terms of its segments, the firm reported its first-quarter results as follows:

Institutional Securities net revenues were $6.1 billion reflecting strength across our sales and trading franchise; Investment Banking Ranked #1 in Global Announced and Completed M&A and Global Equity.

Wealth Management reported net revenues of $4.4 billion, record pre-tax income of $1.2 billion and a pre-tax margin of 26.5%; Strong fee-based asset flows of $18.2 billion for the quarter.

Investment Management net revenues were $718 million reflecting higher management fees; Continued positive long-term net flows in the quarter.

[nativounit]

Book value and tangible book value per common share were $39.19 and $34.04, respectively. Also Morgan Stanley’s Common Equity Tier 1 and Tier 1 risk-based capital ratios under the fully phased-in Standardized Approach were 15.6% and 17.8%, respectively.

The bank did not issue any guidance in the report, but consensus estimates call for $1.13 in EPS on $10.08 billion in revenue for the second quarter. For the 2018 full year, the consensus estimates are $4.52 in EPS and $39.89 billion in revenue.

James P. Gorman, board chair and chief executive, commented:

We delivered very strong results this quarter, with record revenues and net income – and an ROE above our target range. Each of our businesses performed well, with significant client engagement across our global franchise, and Sales and Trading a particular highlight in a more active environment.

Shares of Morgan Stanley closed Tuesday at $53.24, with a consensus analyst price target of $61.17 and a 52-week range of $40.43 to $59.38. Following the announcement, the stock was up 2.5% at $54.58 in early trading indications Wednesday.

[recirclink id=456832]

[wallst_email_signup]

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.