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Morgan Stanley Beats Profit Forecasts Despite Seeing the Biggest Stock-Trading Decline on Wall Street (MS)

Morgan Stanley posted second-quarter earnings on Thursday that surpassed Wall Street expectations for revenue and earnings per share.

At the same time, equities-trading revenue tumbled 14%, the worst of any major Wall Street bank. Overall sales-and-trading revenue dropped by 12% on a weaker quarter for Morgan Stanley's financing business and lower client balances. 

Investment-banking revenue fell by 13% from the same period last year because of fewer advisory deals and slower market volume. 

Here are the key numbers:

  • Revenue: $10.24 billion, versus $9.99 billion expected
  • Net income: $2.2 billion, versus $1.94 billion expected 
  • Earnings per share: $1.23, versus $1.14 expected
  • Equities-trading revenue: $2.13 billion versus $2.27 billion expected
  • Fixed-income-trading revenue: $1.13 billion versus $1.29 billion expected
  • Net interest income: $1.03 billion versus $991.6 million expected

The firm's wealth-management business posted a record pretax income of $1.2 billion on $4.4 billion in revenue. 

"We reported solid quarterly results across all our businesses," James Gorman, the chief executive officer of Morgan Stanley, said in a letter to shareholders. "Firmwide revenues were over $10 billion and we produced an ROE within our target range, demonstrating the stability of our franchise."

The bank also increased its dividend by $0.35 a share and announced it would buy back up $6 billion in stock by the second quarter of 2020.

Morgan Stanley was up 10% year-t0-date through Wednesday.