Morgan Stanley smashes earnings estimates

Morgan Stanley extended Wall Street's pattern of better-than-expected quarterly financial results.

The investment banking giant reported adjusted Q1 earnings of 85 cents per share, beating expectations for 78 cents a share.

Revenue also beat expectations at $9.9 billion for the quarter. Analysts were looking for $9.19 billion.

Morgan Stanley CEO James Gorman said in a statement: "This was our strongest quarter in many years with improved performance across most areas of the firm."

Reflecting some of the broader realities being faced by investment banks, for better and for worse: Morgan Stanley reported in its 8-K that advisory revenue was up from $336 million, to $471 million, on a surge of M&A. However, "on fewer IPOs," equity underwriting revenue fell.

Sales and trading revenue shot up, and compensation and benefits spending also rose, primarily driven by higher revenues, the bank said.

Additionally, Morgan Stanley said it has increased its dividend to $0.15 per share, up from $0.10 per share. Several investment banks made the decision to increase dividend payouts after receiving approval from Washington regulators after March's stress test results.

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