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Additional legal expenses have led Morgan Stanley (MS - Analyst Report) to reduce its first-quarter earnings. The company in its latest quarterly filing has lowered its earnings per share by a cent from the figure reported on Apr 18.

In the latest 10-Q filing with the Securities and Exchange Commission (SEC), Morgan Stanley recorded earnings attributable to common shareholders of $936 million or 48 cents per share. This is lower from $958 million or 49 cents per share reported on Apr 18.

The primary reason for restating the earnings figure is the resolution of certain lawsuits from the time of earnings announcement and the filing of the quarterly document. During that period, Morgan Stanley reached settlement deals with Abu Dhabi Commercial Bank and King County, Washington, related to the sale of structured investment vehicles at the time of financial crisis.

Morgan Stanley is not the only major global bank to restate its first-quarter results due to the resolution of litigation issues. Earlier this week, Bank of America Corporation (BAC - Analyst Report) announced a comprehensive plan to settle its legal dispute with MBIA Inc. . As a result of the settlement agreement, the litigation charge lowered BofA’s first-quarter net income to $1.5 billion or 10 cents per share. On Apr 17, while announcing the first-quarter results, the company reported net income of $2.6 billion or 20 cents per share.

Though the settlement of the legal cases has lowered Morgan Stanley’s first-quarter earnings, it was a positive step for the company. This will help reduce the company’s litigation headwinds going forward.

Additionally, Morgan Stanley has been striving hard to improve its earnings. At present, the company is in the process of buying out the remaining stake in its brokerage joint venture with Citigroup Inc. (C - Analyst Report). This will consequently lower its dependence on volatile trading revenues.

Currently, Morgan Stanley carries a Zacks Rank #3 (Hold).

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