Morgan Stanley's equity revenue exceeded the StreetAccount estimate cited by CNBC by $909 million.
Why it matters: The results provide an early read on institutional trading conditions and Wall Street revenue streams. Equity strength and record Wealth Management revenue helped drive a broader increase in quarterly revenue despite weaker fixed-income performance.
- Third-quarter net revenue rose 12% year over year to $20.338 billion, according to Morgan Stanley's earnings release.
- Equity revenue rose 41% to $5.799 billion, about $909 million above the approximately $4.890 billion StreetAccount estimate cited by CNBC.
- Investment Banking revenue increased 2% to $2.159 billion, helped by higher advisory revenue from completed Americas M&A.
- Morgan Stanley said Wealth Management revenue reached a record $9.065 billion, with $232.4 billion in net new assets.
Morgan Stanley reported its third-quarter results on October 14, with figures for the quarter ended September 30, according to its earnings release. Net income applicable to the company rose to $4.909 billion, or $3.03 per diluted share, from $4.610 billion, or $2.80 per share, a year earlier. Revenue and earnings topped the estimates cited by CNBC.
Equity revenue was $5.799 billion, compared with the approximately $4.890 billion StreetAccount estimate cited in CNBC's report. Morgan Stanley said performance was strong across businesses and regions, driven by client engagement and strength in Asia.
"Institutional Securities benefited from global strength, led by our Equity franchise," CEO Ted Pick said in the earnings release.
Institutional Securities revenue rose about 18% to $10.029 billion. Investment Banking revenue increased 2% to $2.159 billion, as advisory revenue rose to $887 million from $684 million. Lower equity underwriting revenue, which fell to $525 million from $652 million, partly offset the advisory gain.
Fixed Income revenue declined 7% to $2.011 billion. Morgan Stanley attributed the decrease primarily to weaker credit performance in securitized products and lower structured activity in commodities.
Morgan Stanley said Wealth Management revenue reached a record $9.065 billion, with $232.4 billion in net new assets. Investment Management revenue declined to $1.459 billion even as assets under management or supervision rose to $2.046 trillion.
The company repurchased $1.54 billion of common stock during the quarter and declared a $1.15-per-share quarterly dividend, according to the company disclosure.
By the numbers
- $20.338 billion - third-quarter net revenue, up 12% year over year
- $909 million - equity revenue above the approximately $4.890 billion StreetAccount estimate cited by CNBC
- $2.046 trillion - assets under management or supervision in Investment Management
Yes, but: Fixed-income revenue fell 7%, and Investment Banking revenue rose only 2%, so the results were not uniformly stronger across Morgan Stanley's businesses.