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Morgan Stanley (MS) 2Q 2022 earnings


James Gorman, chairman and chief executive officer of Morgan Stanley, speaks during a Bloomberg Television interview in Beijing, China, on Thursday, May 30, 2019.

Giulia Marchi | Bloomberg | Getty Images

Morgan Stanley posted results on Thursday below analysts’ expectations for second quarter profit and revenue on weaker-than-expected investment banking revenue.

Listed here are the numbers:

  • Earnings of $1.39 per share vs $1.53 of estimate of analysts surveyed by Refinitiv
  • Revenue of $13.13 billion vs $13.48 billion estimate

Profit dropped 29% from a yr earlier to $2.5 billion, or $1.39 per share, the Latest York-based bank said in a release. Revenue dipped 11% to $13.13 billion, driven by the steep 55% decline in investment banking revenue.

The outcomes confirm what some analysts had feared for Morgan Stanley, which runs one in every of the larger equity capital markets operations on Wall Street. The firm’s investment banking division produced $1.07 billion in second-quarter revenue, $400 million below analysts’ $1.47 billion estimate that itself had been ratcheted down in recent weeks.

Shares of the bank dipped lower than 1% in premarket trading.

Wall Street banks are grappling with the collapse in IPOs and debt and equity issuance this yr, a pointy reversal from the deals boom that drove results last yr. The change was triggered by broad declines in financial assets, pessimism over the opportunity of a recession and the Russian invasion of Ukraine.

“Overall, the firm delivered a solid quarter in what was a more volatile market environment than we’ve got seen for a while,” CEO James Gorman said in the discharge. He added that good trading results “helped partially counter weaker investment banking activity.”

Equities trading produced $2.96 billion in revenue within the quarter, above the $2.77 billion estimate, while fixed-income trading revenue of $2.5 billion handily exceeded the $1.98 billion estimate.

The firm’s giant wealth management division produced $5.74 billion in revenue, below the $5.99 billion estimate, as lower asset values lowered management fees.

Morgan Stanley co-President Ted Pick said last month that markets could be dominated by concern over inflation and recession in a period of transition after nearly 15 years of easy-money policies by central banks got here to an end.

“The banking calendar has quieted down a bit because individuals are attempting to work out whether we will have this paradigm shift clarified eventually,” Pick said.

Shares of the bank have dropped 24% this yr through Wednesday, worse than the 19% decline of the KBW Bank Index.

Wells Fargo and Citigroup are scheduled to report results on Friday, while Bank of America and Goldman Sachs post on Monday.

This story is developing. Please check back for updates.

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