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Investing

Trouble At Morgan Stanley (MS) With Net Losses Of $436 Million In Mortgage Proprietary Trading

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By Douglas A. McIntyre Published
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Wall St. is selling off Morgan Stanley (MS) before the open on weak earnings. Shares are down over 3%

MS reported income from continuing operations for the second quarter ended May 31, 2008 of $1.026 billion, or $0.95 per diluted share, compared with $2.363 billion, 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 reductions.

Equity sales and trading net revenues of $2.1 billion decreased 11 percent from last year’s second quarter

Fixed income sales and trading net revenues were $414 million, down 85 percent from last year’s second quarter primarily reflecting lower revenues in interest rate, credit & currency products and commodities, and net losses of $436 million in mortgage proprietary trading.

Investment banking delivered revenues of $875 million, down 49 percent from last year’s second quarter.

Listen to the earnings call here.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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