ginton
Morgan Stanley (NYSE:MS) turned in better-than-expected Q2 earnings and revenue on Wednesday, reflecting strong net interest income as wealth management revenue increased quarter-over-quarter and year-over-year. Its provision for credit losses, though, increased more than Wall Street expected.
Q2 GAAP EPS of $2.13, beating the average analyst estimate of $1.96, fell from $2.60 in Q1 and $1.82 in Q2 2024.
Net revenue of $16.8B, beating the consensus estimate of $16.0B, dropped from $17.7B in the prior quarter and climbed from $15.0B a year ago.
“Institutional Securities saw strength and balance across businesses and geographies,” said Chairman and CEO Ted Pick. “Wealth continues to deliver, adding $59B of net new assets and $43B of fee-based flows. Total client assets across Wealth and Investment Management reached $8.2T.”
Morgan Stanley’s (NYSE:MS) net interest income of $2.35B, exceeding the Visible Alpha consensus of $2.29B, was flat with Q1 and increased from $2.07B in last year’s Q2.
Pretax profit margin of 28% vs. 31% in the previous quarter and 27% a year ago. Compensation and benefits, as a percentage of net revenue, was 43% compared with 42% in Q1 and 43% in last year’s Q2.
Total non-compensation expenses were $4.78B vs. $4.54B in the prior quarter and $4.41B a year ago.
Provision for credit losses of $196M, vs. $136M Visible Alpha consensus, rose from $135M in the previous quarter and $76M a year ago.
Return on average tangible common equity of 18.2% vs. 23.0% in Q1 and 17.5% in Q2 2024.
Morgan Stanley (MS) stock slipped 0.5% in Wednesday premarket trading.
Revenue by segment:
-
Institutional Securities: $7.64B dropped 15% Q/Q and increased 9% Y/Y; investment banking revenue of $1.54B fell 1% Q/Q and 5% Y/Y. Equity net revenue of $3.72B slid 10% Q/Q and rose 23% Y/Y, and fixed income net revenue of $2.18B sank 16% Q/Q and rose 9% Y/Y.
-
Wealth Management: $7.76B climbed 6% Q/Q and 14% Y/Y. Asset management revenue of $4.41B was flat Q/Q and increased 11% Y/Y.
-
Investment Management: $1.55B edged fell 3% Q/Q and grew 12% Y/Y. Asset management and related fees of $1.43B slipped 1% Q/Q and rose 7% Y/Y.
Conference call at 9:30 AM ET.
Earlier, Morgan Stanley GAAP EPS of $2.13 beats by $0.17, revenue of $16.79B beats by $760M