Investing.com - Wall Street investment bank Morgan Stanley (N:MS) reported weaker than expected third quarter earnings ahead of Monday’s opening bell, sending its shares lower in pre-market trade.
Morgan Stanley said adjusted earnings per share came in at 34 cents in the three months ended September 30, missing expectations for earnings of 63 cents per share and compared to earnings of 83 cents a share in the same period a year earlier.
Net income was $1.0 billion, compared with net income of $1.7 billion for the same period a year ago.
The bank’s third quarter adjusted revenue totaled $7.33 billion, below forecasts for revenue of $8.54 billion and down 15.7% from revenue of $8.9 billion in the same period last year.
Wealth Management reported a pre-tax margin of 23% for the quarter on lower revenues of $3.6 billion. Fee based asset flows for the quarter were $7.7 billion.
Investment Management net revenues were $274 million reflecting losses in the Merchant Banking business, specifically in Asia private equity. Assets under management or supervision were $404 billion at the end of the quarter.
Equity sales and trading net revenues of $1.8 billion were unchanged from a year ago reflecting strength in prime brokerage and derivatives, partly offset by lower revenues in cash equities.
Fixed Income & Commodities sales and trading net revenues of $583 million decreased from $997 million a year ago primarily reflecting difficult market conditions for our credit and securitized products businesses.
James P. Gorman, Chairman and Chief Executive Officer, said, "The volatility in global markets in the third quarter led to a difficult environment, impacting in particular our Fixed Income business and our Asia Merchant Banking business."
Immediately after the earnings announcement, Morgan Stanley shares plunged $1.75, or 5.15%, in trading prior to the opening bell to hit $32.20 from a closing price of $33.95 on Friday.
Meanwhile, U.S. stock futures pointed to a lower open. The Dow futures shed 29 points, or 0.17%, the S&P 500 futures dipped 4 points, or 0.19%, while the Nasdaq 100 futures declined 7 points, or 0.15%.