Morgan Stanley revenue tops estimates, but CEO warns of geopolitical, economic risks ahead

Earnings

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The Morgan Stanley headquarters is seen in New York City on Jan. 17, 2023.
Michael M. Santiago | Getty Images

Morgan Stanley on Tuesday reported fourth-quarter revenue that surpassed expectations, boosted by the strength in investment banking.

Here’s how the bank did compared with Wall Street expectations:

  • Earnings per share: 85 cents, may not compare with $1.01 expected, according to LSEG
  • Revenue: $12.90 billion vs. $12.75 billion, expected, according to LSEG

Shares of Morgan Stanley climbed as much as 2% in premarket trading following the results.

Morgan Stanley said its revenue from investment banking rose 5% from a year ago on the back of a 25% increase in fixed income underwriting revenue amid higher investment grade issuances.

Net income came to $1.52 billion, or 85 cents per diluted share, down more than 30% from $2.24 billion, or $1.26 per diluted share, a year ago.

The bank’s results were hit by two one-time regulatory charges, however. There was a $286 million charge related to a Federal Deposit Insurance Corporation special assessment and a $249 million legal charge to settle a criminal investigation and a related Securities and Exchange Commission probe of the unauthorized disclosure of block trades.

This is the first earnings report under new CEO Ted Pick, who succeeded James Gorman as CEO at the start of 2024. Pick is a Morgan Stanley veteran who rose through the ranks to lead the bank’s Wall Street operations.

“In 2023, the Firm reported a solid ROTCE [return on average tangible common shareholders’ equity] against a mixed market backdrop and a number of headwinds,” Pick said in a statement. “We begin 2024 with a clear and consistent business strategy and a unified leadership team. We are focused on achieving our long-term financial goals and continuing to deliver for shareholders.”

Shares of the New York-based bank have fallen nearly 4% in 2024 after a 10% gain last year.

This is breaking news. Please check back for updates.

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