Morgan Stanley39s revenue beats estimates supported by strong investment banking

Morgan Stanley's revenue beats estimates, supported by strong investment banking business

Morgan Stanley's headquarters is seen in New York City on January 17, 2023.

Michael M. Santiago | Getty Images

Morgan Stanley on Tuesday reported fourth-quarter revenue that beat expectations, driven by strength in investment banking.

Here's how the bank performed compared to Wall Street's expectations:

  • Earnings per share: 85 cents, may not be comparable to expected $1.01, LSEG said
  • Revenue: $12.90 billion versus expected $12.75 billion, according to LSEG

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

Morgan Stanley said its investment banking revenue rose 5% from a year ago, driven by a 25% increase in bond underwriting revenue from higher investment-grade issuance.

Net income was $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 earlier.

However, the bank's results were impacted by two one-time regulatory burdens. There was a $286 million charge related to a special assessment of the Federal Deposit Insurance Corporation and a $249 million lawsuit to settle a criminal investigation and a related Securities and Exchange Commission investigation into trespassing Block Trade Disclosure.

This is the first earnings report under new CEO Ted Pick, who succeeded James Gorman as CEO in early 2024. Pick is a Morgan Stanley veteran who worked his way up through the bank's executive ranks on Wall Street.

“In 2023, the company reported a solid ROTCE [return on average tangible common shareholders’ equity] “Amid a mixed market environment and a number of headwinds,” Pick said in a statement. “We enter 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 our shareholders.”

The wealth management business posted net sales of $6.65 billion in the fourth quarter, slightly higher than the $6.63 billion in the year-ago quarter. Investment management revenue was $1.46 billion in the quarter, little changed year-over-year.

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