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James Gorman, chief executive officer of Morgan Stanley.
Morgan Stanley posted profit that beat analysts’ expectations on strong trading and investment banking results.
The company said profit surged about 33 percent to $2.4 billion in the second quarter from a year earlier, exceeding the $2 billion estimate of analysts surveyed by Thomson Reuters. Earnings per share of $1.30 exceeded the $1.11 estimate. Revenues climbed 12 percent to $10.6 billion, about $500 million more than analysts expected.
The shares climbed more than 3 percent in pre-market trading in New York.
“We reported robust revenue and earnings growth this quarter with strength across all businesses and geographies,” Chief Executive Officer James Gorman said in a statement. “Our strong global franchise positions us well to continue to grow organically across each of our businesses and to deliver operating leverage.”
Under Gorman, 59, Morgan Stanley has emphasized its wealth-management division, a far steadier business than trading operations. He has also overhauled its fixed-income business, moves that helped the firm eclipse rival Goldman Sachs in market capitalization earlier this year. The executive behind that bond-trading rebound, Ted Pick, was promoted this month to gain oversight of investment-banking activities.
Still, the firm was forced last month to maintain its capital-return plans unchanged from last year after fumbling a key part of its annual stress test. Morgan Stanley shares are down 6.2 percent this year, under-performing the KBW Bank Index, which is almost unchanged.
Here’s what Wall Street expected:
Earnings: $1.11 per share, a 28 percent increase from a year earlier, according to the average analyst estimate compiled by Thomson Reuters.
Revenue: $10.1 billion, a 6.3 percent increase from a year earlier, according to the average analyst estimate compiled by Thomson Reuters.
Wealth management: $4.43 billion, according to FactSet
Trading: $3.58 billion, according to FactSet
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