Morgan Stanley beat expectations in better-than-expected bond trading

Morgan Stanley said Friday that first-quarter profit and revenue exceeded expectations due to stronger-than-expected trading results and investment banking.

 

The bank's profit was $4.1 billion, or $2.19 per share. The Company reported adjusted earnings per share of $2.22 per share, excluding merger costs; analysts expected $1.70.

 

Here's what Wall Street expects:

• Profit: $1.70 per share, up 68% from a year earlier, according to Refinitiv
• Revenue: $14.1 billion, up 49% from a year earlier;
• Capital management: $5.97 billion, according to FactSet;
• Trading: Shares $2.71 billion, Fixed income $2.11 billion;
• Investment banking: $2.13 billion;

 

Expectations for Morgan Stanley are rising after rivals posted strong trading and investment banking results.

 

The SPAC release boom has led to a huge increase in fees for equity markets, and trading departments have benefited from strong activity in fixed income and stock markets. In addition, busy stock markets should help Morgan Stanley's largest asset management division, as commissions typically make up a percentage of clients' assets under management.

 

CEO James Gorman announced $20 billion worth of deals last year, the most aggressive takeover since the financial crisis. He spent $13 billion on the acquisition of E-Trade to expand its reach among the wealthy, and $7 billion to buy Eaton Vance to boost its investment management business. The acquisition of Eaton Vance was closed in the first quarter.

 

Morgan Stanley is the last of the six largest U.S. banks to report first-quarter profit.

 

JPMorgan Chase, Bank of America, Wells Fargo and Citigroup beat analysts' expectations by releasing money previously set aside to cover loan losses. Goldman Sachs' main competitor exceeded forecasts for strong advisory and trading results.