Financial services giant Morgan Stanley (NYSE:MS) posted much better-than-expected third quarter profits and revenue this morning, signaling a continued recovery in its trading businesses.
The New York City-based company reported Q3 EPS of $0.81, easily topping analyst estimates for $0.63. Revenue surged 14.7% from last year to $8.91 billion, also beating expectations of $8.16 billion.
As for its individual business units, MS noted the following:
- Institutional Securities net revenues were $4.6 billion.
- Wealth Management net revenues were $3.9 billion, while fee-based asset flows for the quarter were $13.5 billion.
- Investment Management net revenues were $552 million, on assets under management or supervision
of $417 billion.
The company commented via press release:
James P. Gorman, Chairman and Chief Executive Officer, said, “This quarter we saw record revenues in Wealth Management and a strong performance in our Sales and Trading business. While the environment was more challenging for our equity underwriting and asset management businesses, our expense initiatives remain on track. Overall the results reflect steady progress against our long term strategic goals.”
Morgan Stanley shares rose $0.43 (+1.33%) to $32.75 in premarket trading Wednesday. Prior to today’s report, MS had risen 1.6%, trailing the 4.83% gain in the benchmark S&P 500 during the same period.
ETF investors will note that MS represents a huge portion of the iShares Dow Jones US Broker-Dealers Index Fund (IAI). The stock is IAI’s second largest holding at 9.22%, second only to Goldman Sachs at 10.17%. Thus, any big moves in Morgan Stanley’s share price are bound to have outsized effects on IAI’s price action as well.