Morgan Stanley beats estimates on better-than-expected outcomes on Wall Road and in wealth administration

James Gorman, Chairman and CEO of Morgan Stanley, speaks during an interview with Bloomberg Television in Beijing, China on Thursday, May 30, 2019.

Giulia Marchi | Bloomberg | Getty Images

Morgan Stanley posted fourth quarter earnings and sales that exceeded analysts’ expectations for strong trading, investment banking and wealth management results.

The company posted earnings up 51% to $ 3.39 billion, or $ 1.81 per share, compared to the estimate of $ 1.27 by analysts surveyed by Refinitiv. Revenue of $ 13.64 billion was over $ 2 billion above the estimate of $ 11.54 billion.

The bank’s shares fell 2.5% in premarket trading.

That is the question after trading results at rivals Goldman Sachs and JPMorgan Chase helped add blows while markets on Bank of America and Citigroup were under-challenged.

Morgan Stanley, led by CEO James Gorman, also has the largest wealth management business among the six largest US banks, which typically benefit from rising markets. That business is backed by the bank’s $ 13 billion acquisition of E-Trade, which was announced a year ago. The fourth quarter is the first period in which E-Trade will be integrated into the larger company.

Morgan Stanley is the last major US bank to post earnings in the fourth quarter. JPMorgan and Goldman Sachs exceeded analysts’ expectations for sales and earnings, aided by trading, while Citigroup, Wells Fargo and Bank of America were disappointed with sales as credit margins were squeezed.

The shares of New York-based Morgan Stanley rose 33% in 2020, outperforming the KBW Bank Index’s 4.3% decline.

Here’s what Wall Street expected:

Earnings: $ 1.27 per share, 2.4% less than a year earlier, according to Refinitiv.

Revenue: $ 11.5 billion, up 6.3% from a year earlier.

Asset Management: $ 5.2 billion, according to FactSet.

Trading: stocks $ 2.14 billion; fixed income $ 1.46 billion.

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