Morgan Stanley beats, trading delivers strong results despite ‘subdued environment’ (MS)

Morgan Stanley beat Wall Street estimates for second quarter earnings, following the trend set by its peers.

The bank delivered earnings per share of $0.87, up from $0.75 in the second quarter of 2016, and ahead of the $0.76 expected by analysts.

Here’s what you need to know:

• The bank delivered net revenues of $9.5 billion, up from $8.9 billion a year ago.
• Net revenues increased in each of the three key business lines: institutional securities, wealth management and investment management.
• Institutional securities, which houses sales and trading and investment banking, generated $4.8 billion in revenues, up from $4.6 billion a year ago, driven by a strong performance in investment banking and in equities trading. Net income for the unit fell slightly to $1.4 billion. Equity sales and trading revenues tipped up, while fixed income trading revenues dropped slightly.
• Wealth management posted $4.15 billion in revenues, up from $3.8 billion. The unit had a pre-tax margin of 25%, delivering net income of $1.1 billion, up from $859 million.
• Investment management revenues increased to $665 million, up from $583 million. Net income for the unit increased to $142 million.

Morgan Stanley’s cap a generally strong showing from its peers. Each of the big banks beat estimates, with JPMorgan hauling in record earnings from its commercial banking and asset and wealth management units. On Tuesday, Bank of America Merrill Lynch bested Wall Street estimates, with record quarters in global banking and wealth management, while Goldman Sachs beat estimates despite a sharp drop in trading revenues.