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James Gorman, chairman and CEO of Morgan Stanley.
Morgan Stanley is set to report fourth-quarter results at about 7 am Thursday.
It's the last to report of the big US banks. Its Wall Street competitors have each exceeded expectations thus far, despite taking sizable losses attributable to tax reform.
Analysts are expecting Morgan Stanley to produce adjusted earnings of $0.77 a share.
But they're expecting the firm to report a non-adjusted loss of $0.33 a share after accounting for an estimated $1.25 billion hit from the new tax law, primarily from deferred tax assets that declined in value.
Still, that's a much smaller one-time tax loss than competitors reported: JPMorgan earlier reported a $2.4 billion fourth-quarter loss, Citigroup a $22 billion loss, Bank of America a $2.9 billion loss, and Goldman Sachs a $4.4 billion loss.
Each of the banks has been buoyant about the long-term prospects of tax reform, however.
Here's what else analysts will be looking for from Morgan Stanley:
- Revenues of $9.24 billion
- Adjusted net income of $1.43 billion
- Like the rest of Wall Street, a decline in trading revenues - especially in fixed income. How will the results stack up with Goldman Sachs and other rivals?
- An increase in investment banking revenues
- Any exposure to Steinhoff International?
As a refresher, Steinhoff International is the scandal-wracked South African retailer that has been singlehandedly blowing a hole through Wall Street bank earnings, reappearing in the fourth-quarter announcements of major banks as the culprit for hundreds of millions in unexpected, one-time losses.
A group of Wall Street banks loaned money last year to an entity controlled by Christo Wiese, the former chairman of Steinhoff, and they subsequently sold off chunks of the loan to other banks. The deal went belly-up after Steinhoff stock cratered.
Will Morgan Stanley be on the hook for any substantial amount?