Morgan Stanley jumps after reporting better than expected fourth-quarter earnings (MS)

Sean Reid
January 19, 2018

Analysts had been expecting Morgan Stanley to produce adjusted earnings of $0.77 a share. For the past month, Morgan Stanley's stock has been 5.15%, 13.10% for the last quarter, 22.62% for the past six months and 31.32% for the past 52 weeks.

Total fourth quarter revenues were $9.5 billion, Morgan Stanley reported. "This, coupled with strong expense discipline demonstrates the firm's operating leverage". This includes a net discrete tax provision of $990 million, which is made up of a $1.2 billion net discrete tax provision.

Gorman, during a conference call, went out of his way to woo investors by suggesting that extra anticipated savings from its lowered tax bill would be going to shareholders. That charge was partially offset by a $168 million tax benefit from the re-measurement of some reserves and related interest on "the status of multi-year Internal Revenue Service tax examinations". Shares of trust bank Bank of New York Mellon declined after executives said almost all of this year's benefits from the new US tax law will go to technology upgrades and employees instead of shareholders.

Wealth management revenue grew to $4.4 billion from $4 billion a year ago. Full year net revenues were $37.9 billion compared with $34.6 billion, prior year.

However, its Wealth Management performance helped negate some of that fall, rising 10.5% to $4.4 billion from $4.0 billion in Q4 2016.

Bloomberg News reports that after reporting a plunge in bond trading, Goldman's market capitalization fell to $99.4 billion at the close on Wednesday, a fraction less than Morgan Stanley.

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