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Morgan Stanley earnings 4Q 2018 disappoint



On Thursday, Morgan Stanley reported profits and revenues below analysts' expectations, as the whip markets last year paid a remuneration to the bank's two largest companies. Shares fell in dealership trade.

4 billion compared to the estimate of EUR 4.45 billion, with only the smallest division of the bank, investment management exceeding estimates, producing $ 684 million in revenue, compared to the estimate of $ 656.7 million.

"This is not Morgan Stanley's finest hour," said Octavio Marenzi, CEO of Capital Markets Opimas. In asset management, Morgan Stanley's revenue was 6% lower, while competing companies were able to outperform single-digit growth. In stock trading, Morgan Stanley traded even further behind the competition with flat income, where other investment banks could take advantage of market volatility and show double-digit growth. "

Futures prices of Morgan Stanley shares were originally thought after the report, but recovered some of the losses. They were down 3.6 percent less than an hour before the opening call.

Under CEO James Gorman, Morgan Stanley has expanded his wealth management division, a more stable business than its trading activities. 19659003] In theory, the increased emphasis on wealth management should contribute to a decline in trading income among turbulent markets last year, every major Wall Street bank to publish results before Thursday booked a decline At least 16 percent in interest income that customers withdrew due to sharp asset class movements around the world.

But Morgan Stanley released the weakest interest income from its peers, declining 30 percent to $ 564 million compared to the $ 806 million estimate. The stock market's revenue of $ 1.9 billion came below $ 2.04 billion in estimates steringsbanken produced 1.4 billion DKK. Dollars in revenue, essentially matching analyst estimate, as stronger advisory fees offset lower stock and bond issuance.

The fourth quarter "ended messily," said Morgan Stanley Chief Financial Officer Jonathan Pruzan. Echo what other bankers have said, January began more favorably for trading desks, he said. "Some of the relationships that broke down are shooting again."

Morgan Stanley also updated its strategic goals and gave investors guidance on performance metrics in 2019. During last year's review, Gorman said the bank could achieve returns on average common equity from 10 to 13 percent, expanding its market share in investment banking and trading and increase wealth management profit margins to 26 to 28 percent. The bank achieved these goals in 2018 and repeated these goals in 2019 on Thursday.

"In 2018, we achieved record earnings and earnings and growth in all of our business segments – despite a challenging fourth quarter," Gorman said in earnings announcement. "While the global environment remains uncertain, our franchise is strong and we are well equipped to pursue growth opportunities and serve our customers."

The bank is open to acquisitions in the wealth management space, Gorman said during the conference. 19659003] Shares of Morgan Stanley fell 24 percent last year, worse than 20 percent decline in the KBW Bank Index.

Wall Street is expected here:

  • Earnings: 89 cents a. Share, according to Refinitiv.
  • Revenue: $ 9,295 billion.
  • Treasury: 4.45 billion revenue, according to FactSet
  • Trading: Stocks: $ 2.04 billion. Fixed income: $ 806 million.

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