Morgan Stanley (MS, Financial) reported a significant 32% increase in third-quarter profits, driven by higher-than-expected revenue figures. The company’s earnings exceeded forecasts, pushing its stock price to its largest surge in nearly four years.
In the latest quarter, Morgan Stanley's trading business revenue grew by 13%, a result of robust market performance and a rebound in investment banking fees. The firm's wealth management segment also performed well, generating $7.27 billion in revenue and adding $64 billion in new assets, surpassing analyst expectations.
Sharon Yeshaya, Morgan Stanley's Chief Financial Officer, highlighted the positive environment contributing to the strong quarter. She noted that while this quarter's performance was impressive, it was only the beginning of a strengthening capital market.
Morgan Stanley's stock rose as much as 8.2%, reaching the highest intraday increase since November 2020. It was trading up 7.7% to $120.89, marking a 30% gain year-to-date.
CEO Ted Pick expressed confidence in the company's investment banking unit, citing a long-term cycle of fee recovery, positioning Morgan Stanley favorably. The firm has been assuring investors of the growing profitability of its extensive wealth management operations.
Fixed income trading revenues were reported at $2 billion, above the analyst forecast of $1.85 billion, although still the smallest among Wall Street's top five firms. Meanwhile, equity trading revenue totaled $3.05 billion, with stock market gains partially offsetting the slowdown in fixed income. Comparatively, JPMorgan's equity trading revenue increased by 27%, while Goldman Sachs and Bank of America saw an 18% rise each.
Morgan Stanley earned $546 million in advisory fees, surpassing the expected $525 million, and equity underwriting revenue was $362 million.
Overall, the company's total revenue reached $15.4 billion, beating the estimated $14.3 billion. The wealth management business reported a pre-tax profit margin of 28.3%, and earnings per share stood at $1.88.
