Morgan Stanley Blows Away Expectations

Investment bank Morgan Stanley crushed fourth quarter earnings estimates on Thursday, joining rivals JPMorgan Chase, Citigroup, and Bank of America in a strong fourth quarter performance for the banks.

Analysts had been expecting Morgan Stanley to deliver earnings of $0.99 a share, but blew away that estimate with earnings of $1.30 a share, for a 46% increase over the same quarter last year. Revenues also blew away expectations, with analysts anticipating revenue of $9.52 billion, but Morgan Stanley delivering revenue of $10.86 billion, for a jump of 27% from the same quarter last year.

Shares gained 7% on Thursday in response to the strong results.

Management said the revenue and earnings beats came from strength in all three of the bank’s main business units. There was strong growth seen in sales and trading, asset management, and investment management.

The strong fourth quarter also gave Morgan Stanley record annual revenue and earnings.

Just as competitors JPMorgan and Goldman Sachs reported a rebound in trading revenue, so too did Morgan Stanley. Bond trading results were spectacular, powering the firms institutional securities trading division to a 32% jump in revenue. Fixed income trading, equity trading, and investment banking all posted strong revenue gains as well.

The smallest division, investment management, produced the largest upside surprise. Revenues came in at $1.36 billion, which was nearly 100% above the same quarter last year and blew the $783.2 million estimate away by nearly half a billion dollars.

Also helping lift the stock was raised guidance from Morgan Stanley management for its wealth management division in 2020.