Additional legal expenses have led
) to reduce its first-quarter earnings. The company in its latest
quarterly filing has lowered its earnings per share by a cent
from the figure reported on Apr 18.
In the latest 10-Q filing with the Securities and Exchange
Commission (SEC), Morgan Stanley recorded earnings attributable
to common shareholders of $936 million or 48 cents per share.
This is lower from $958 million or 49 cents per share reported on
The primary reason for restating the earnings figure is the
resolution of certain lawsuits from the time of earnings
announcement and the filing of the quarterly document. During
that period, Morgan Stanley reached settlement deals with Abu
Dhabi Commercial Bank and King County, Washington, related to the
sale of structured investment vehicles at the time of financial
Morgan Stanley is not the only major global bank to restate its
first-quarter results due to the resolution of litigation issues.
Earlier this week,
Bank of America Corporation
) announced a comprehensive plan to settle its legal dispute with
). As a result of the settlement agreement, the litigation charge
lowered BofA's first-quarter net income to $1.5 billion or 10
cents per share. On Apr 17, while announcing the first-quarter
results, the company reported net income of $2.6 billion or 20
cents per share.
Though the settlement of the legal cases has lowered Morgan
Stanley's first-quarter earnings, it was a positive step for the
company. This will help reduce the company's litigation headwinds
Additionally, Morgan Stanley has been striving hard to improve
its earnings. At present, the company is in the process of buying
out the remaining stake in its brokerage joint venture with
). This will consequently lower its dependence on volatile
Currently, Morgan Stanley carries a Zacks Rank #3 (Hold).
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