Morgan Stanley (MS) Q3 2023 earnings

Morgan Stanley Chairman and Chief Executive James Gorman speaks during the annual meeting of the Institute of International Finance on October 10, 2014 in Washington.

Joshua Roberts | Reuters

Morgan Stanley reported third-quarter results on Wednesday that beat earnings estimates on better-than-expected trading revenue.

Here’s what the company reported:

  • Earnings per share: $1.38 versus the $1.28 estimate from LSEG, formerly known as Refinitiv
  • Revenue: $13.27 billion vs. expected $13.23 billion

Profit fell 9% from a year earlier to $2.41 billion, or $1.38 per share, the New York-based bank said in a statement opinion. Revenue rose 2% to $13.27 billion, largely in line with expectations.

Morgan Stanley’s trading activities helped offset revenue shortfalls elsewhere in the company. The bank’s bond traders brought in $1.95 billion in revenue, about $200 million more than the StreetAccount estimate, while its stock traders brought in $2.51 billion in revenue, up $100 million than expected.

But the bank’s all-important wealth management division generated revenue of $6.4 billion, more than $200 million below estimates, as compensation costs rose in the division.

Investment banking accounted for another miss this quarter, posting revenue of $938 million, below estimates of $1.11 billion, as the company cited weaknesses in mergers and initial public offerings. The bank’s investment management division largely met expectations with revenue of $1.34 billion.

Shares of Morgan Stanley fell 3.2% in premarket trading.

CEO James Gorman called a “mixed” environment for its business and acknowledged that the company’s wealth management division had accumulated less net assets than in recent quarters. The asset management business is still on track to meet its three-year goal of generating $1 trillion in new assets, he told analysts on Wednesday.

Morgan Stanley, led by Gorman since 2010, has managed to avoid the turmoil that has hit some rivals recently. While Goldman Sachs had to switch to private customer business after an excursion Citigroup As the company struggles to increase its share price, Morgan Stanley’s priority is an orderly CEO succession.

In May, Gorman announced his plan to step down within a year, capping a successful tenure marked by massive acquisitions in wealth and wealth management. Morgan Stanley’s board had narrowed the search for his successor to three internal executives, he said at the time.

Gorman reiterated his desire to hand over the CEO position to a successor within a few months.

“This company is in excellent shape despite the geopolitical and market turmoil we find ourselves in,” Gorman said. “My hope and expectation is to hand over Morgan Stanley with as clean a balance sheet as possible and to resolve as few of our outstanding issues in the next few months.”

Last week, JPMorgan Chase, Wells Fargo and Citigroup each beat their third-quarter profit expectations, helped by low borrowing costs. Goldman Sachs and Bank of America also beat estimates as bond trading results came in stronger than expected.

This story is developing. Please check back for updates.

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