Investing.com - Shares in Morgan Stanley (NYSE:MS) rose to their highest level in seven months after the bank appeared to navigate volatility in global markets in the first quarter slightly better than the market had expected.
Wall Street’s second-biggest investment bank said revenue fell by 7.1% from a year earlier, due to declines in revenue from both equity and bond markets, as well as in its advisory business. Investment banking revenues were down 24% from a year ago. Earnings per share fell to $1.39 from $1.45, as the bank offset the drop in revenue by setting aside less money for variable compensation.
As of 0730 AM ET (1130 GMT), the shares were up 3.2% in premarket trading at $48.50
All of Morgan Stanley’s major rivals have posted weak returns on their markets-focused businesses – not least because of comparison effects with an extraordinarily high base a year earlier. However, in contrast to Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM) and Citigroup (NYSE:C), Morgan Stanley has no meaningful exposure to the consumer or small business lending to compensate.
Even so, revenue of $10.29 billion was nearly 4% better than a consensus forecast of $9.91 billion, while earnings per share of $1.33 was some 14% ahead of forecasts. The bank said around 6c of the earnings improvement was due to “intermittent” tax-related factors.
In a statement, chairman and chief executive James Gorman acknowledged that the bank had had a “slow start” to the year, but said the bank was “well positioned to serve our clients and invest in our business.”
Morgan Stanley follows other major Financial sector earnings this month
On Friday, JPMorgan reported first quarter EPS of $2.65 on revenue of $29.85B, compared to forecasts of EPS of $2.35 on revenue of $28.44B.
Bank of America earnings Beat analysts' expectations on Tuesday, with first quarter EPS of $0.7 on revenue of $23B. Investing.com analysts expected EPS of $0.66 on revenue of $23.2B
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