Morgan Stanley tops estimates as equities trading revenue beats expectations by $909 million — SkimNews
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- Morgan Stanley reported Q3 EPS of $3.03 against a $2.91 estimate and revenue of $20.34 billion against a $19.95 billion estimate, with profit climbing 6.5% to $4.91 billion on 12% revenue growth
- Morgan Stanley's equities trading division posted a 41% revenue increase to $5.8 billion, beating the StreetAccount forecast by roughly $909 million, with the bank citing Asia as a source of particular strength
- Fixed income trading revenue fell 7% to $2.01 billion, approximately $260 million below expectations, driven by declines in credit and commodities
- Investment banking revenue edged up 2% to $2.16 billion, roughly $110 million short of estimates, as advisory gains on completed mergers were offset by lower IPO equity underwriting and declining fixed income underwriting
- Wells Fargo analyst Mike Mayo called the results 'good, but not great' in a Wednesday note, noting slower improvement in some business metrics
- Shares declined about 2% in premarket trading despite the beat, as investors await CEO Ted Pick's outlook on M&A and IPO pipelines amid interest-rate volatility
Why it matters: Morgan Stanley's quarter reveals a two-speed Wall Street: the equities trading boom generated a $909 million windfall that papered over a $260 million miss in fixed income and a $110 million shortfall in investment banking. The 2% premarket slide after a headline beat — echoed in Mike Mayo's 'good, but not great' verdict — shows the Street wanted more breadth, not just one blockbuster franchise carrying the quarter.
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