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Morgan Stanley (MS) Q3 Earnings & Revenue Down Y/Y

Have you been eager to see how Morgan StanleyMS performed in Q3 in comparison with the market expectations? Let's quickly scan through the key facts from this New York-based leading financial services holding company's earnings release this morning:

Earnings

Morgan Stanley came out with earnings per share from continuing operations of 48 cents. Excluding DVA, adjusted earnings stood at 34 cents. The Zacks Consensus Estimate for the quarter was 64 cents.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for Morgan Stanley depicted a neutral stance prior to the earnings release. The Zacks Consensus Estimate remained flat over the last 7 days.

However, Morgan Stanley has a decent earnings surprise history. The company delivered positive earnings surprise in the prior three of four quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 10.35% in the trailing four quarters.

Revenue Came In Lower Than Expected

Morgan Stanley posted net revenues (excluding DVA adjustments) of $7.33 billion, which was below the Zacks Consensus Estimate of $8.64 billion. Further, it compared unfavorably with the year-ago number of $8.69 billion.

Key Statistics:

  • Underperformance in Fixed Income & Commodities income
  • Continued strength in Equity Sales & Trading
  • Investment Banking ranked #1 in Global IPOs and #2 in Global announced M&A

James P. Gorman, Chairman and Chief Executive Officer, said, "The volatility in global markets in the third quarter led to a difficult environment, impacting in particular our Fixed Income business and our Asia Merchant Banking business."

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #4 (Sell) for Morgan Stanley. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look unfavorable, it all depends on what sense the just-released report makes to the analysts.

How the Market Reacted So Far

Following the earnings release, Morgan Stanley shares were down more than 5% in the pre-trading session. This is contradictory to what the stock witnessed in the prior-day's session. Clearly, the initial reaction shows that the investors have not considered the results in their favor. However, the full-session's price movement may indicate a different picture.

Check back later for our full write up on this Morgan Stanley earnings report!

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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