Morgan Stanley (MS) Q2 2024 Results

Morgan Stanley said second-quarter earnings and revenue beat analysts’ estimates due to stronger-than-expected trading and investment banking results.

Here’s what the company reported:

• Profits: $1.82 per share vs. LSEG’s estimate of $1.65 per share
• Revenue: $15.02 billion vs. $14.3 billion estimate

The bank said profit rose 41% from the same period a year earlier to $3.08 billion, or $1.82 per share, thanks to a rebound in activity on Wall Street. Revenue rose 12% to $15.02 billion.

But the bank’s shares fell as much as 3.4% in premarket trading after the bank’s wealth management division missed estimates due to a sharp decline in interest income.

Wealth management revenue rose 2% to $6.79 billion, below the estimate of $6.88 billion, and interest income fell 17% from a year earlier to $1.79 billion.

Morgan Stanley said this is because its wealthy clients continue to shift cash into higher-yielding assets, thanks to the rate environment, resulting in lower deposit levels.

Morgan Stanley investors value the more stable nature of the wealth management business versus the less predictable nature of investment banking and trading, and will want to know more about expectations for the business going forward.

Still, the bank benefited from its Wall Street-focused business model in the quarter, as a pickup in commercial and investment banking helped the bank’s institutional securities division rake in more revenue than its wealth management division, reversing the usual dynamic.

Equity trading generated an 18% increase in revenue to $3.02 billion, beating the StreetAccount estimate by about $330 million. Fixed-income trading revenue increased 16% to $1.99 billion, beating the estimate by $130 million.

Investment banking revenue rose 51% to $1.62 billion, beating estimates by $220 million, helped by increased fixed-income underwriting activity. Morgan Stanley said this was primarily due to non-investment-grade companies taking on debt.

“The company had another strong quarter in an improving capital markets environment,” CEO Ted Pick said in the statement. “We continue to execute on our strategy and remain well positioned to deliver long-term growth and value for our shareholders.”

Last week, JPMorgan Chase, Wells Fargo and Citigroup Each beat revenue and profit expectations, a streak that continued Goldman Sachs on Monday, helped by a rebound in activity on Wall Street.

This story is developing. Please check back for updates.