Morgan Stanley gains as 4th-quarter earnings beat expectations on growth in wealth management revenue
- Morgan Stanley stock rose Wednesday after the investment bank's Q4 earnings surpassed expectations.
- Adjusted earnings of $2.08 per share were ahead of Wall Street's estimate of $1.94 per share.
- Revenue increased at the wealth management and investment management groups.
Morgan Stanley on Wednesday posted fourth-quarter earnings that beat analyst expectations earnings, aided by growth in wealth management and fees taken in for advising on mergers and acquisitions.
Shares rose as much as 3.2% to $97.01 in early trading following the release of the quarterly figures.
Here are the key numbers:
Revenue: $14.52 billion, versus $14.56 billion FactSet estimate
Adjusted EPS: $2.08, versus $1.94 estimate
Overall revenue grew to $14.52 billion from $13.4 billion a year ago, with gains logged for the wealth management and investment management segments.
Revenue at the wealth management division grew by 10% from the year-ago period to $6.25 billion as the business added net new assets of $438 billion. Asset management revenue increased by 10%, buoyed in part by market appreciation.
"Combined with Investment Management, we now have $6.5 trillion in client assets. Our integrated investment bank has continued to gain wallet share. We have a sustainable business model with scale, capital flexibility, momentum and growth," CEO James Gorman said in the earnings statement.
Investment management revenue jumped by 59% to $1.75 billion in part as its Eaton Vance acquisition drove up asset management fees.
Institutional securities revenue decreased by 4% to $6.67 billion, with equity underwriting revenue down on declines in follow-on offerings and blocks that were partially offset by higher revenues from private placements.
But advisory revenue climbed by nearly 30% to $1.07 billion on higher completion of M&A transactions. Meanwhile, equities trading revenue rose 13% to $2.86 billion, but fixed income trading slumped 31% to $1.23 billion.