morgan stanley announced better-than-expected third-quarter results with blockbuster performance in its stock trading franchise.
Here’s what the company reported:
Earnings per share: $3.03 vs. LSEG estimate of $2.91 Revenue: $20.34 billion vs. LSEG estimate of $19.95 billion
The company said profit rose 6.5% to $4.91 billion, or $3.03 per share. Sales increased 12% to $20.34 billion.
Revenue at Morgan Stanley’s equity trading division, long a flagship business, rose 41% to $5.8 billion, beating Street estimates by about $909 million.
Morgan Stanley noted broad-based strength across equity products and regions, but singled out Asia as a particular source of strength in the quarter. Profits in this business helped offset disappointments in other areas.
Fixed income trading revenue fell 7% to $2.01 billion, about $260 million less than expected, due to a decline in credit and commodities.
Investment banking revenue rose 2% to $2.16 billion, about $110 million less than expected. The bank cited lower equity underwriting due to fewer initial public offerings and lower debt underwriting, although there was an increase in advisory income as more mergers were completed.
Still, Wells Fargo analyst Mike Mayo said in a note Wednesday that some business metrics showed slowing improvement in the quarter, calling the results “good but not great.”
Morgan Stanley shares were down about 3% in midday trading.
Morgan Stanley CEO Ted Pick told CNBC’s Leslie Picker on Wednesday that the economy is currently facing two key factors: a boost from increased artificial intelligence and the impact of geopolitical conflict.
Pick noted that activity across Wall Street has slowed since early September due to concerns about foreign conflicts, inflation and surging yields.
“The interplay between AI phenomena and geopolitics has been the dominant reality throughout the year,” Pick said. “This is actually two very different stories, and I would like to think that once we have some control over geopolitics, we get the first story, which is a positive one.”
He added that Pick is “cautiously optimistic” about the market in the fourth quarter.
