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Morgan Stanley (MS) Beats Q2 Earnings and Revenue Estimates

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Have you been eager to see how Morgan Stanley (MS - Free Report) performed in Q2 in comparison with the market expectations? Let’s quickly scan through the key facts from this New York-based leading financial services holding company’s earnings release this morning:

An Earnings Beat

Morgan Stanley came out with earnings of $1.30 per share, which handily surpassed the Zacks Consensus Estimate of $1.08.

Improved revenues were the main reason for earnings beat.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for Morgan Stanley depicted bearish trend prior to the earnings release. The Zacks Consensus Estimate has declined 6.1% over the last 30 days.

Notably, Morgan Stanley has an impressive earnings surprise history. Before posting the earnings beat in Q2, the company delivered positive surprises in each of the prior four quarters, as shown in the chart below:

Morgan Stanley Price and EPS Surprise

 

Morgan Stanley Price and EPS Surprise | Morgan Stanley Quote

Overall, on an average the company posted positive earnings surprise of 12.9% in the trailing four quarters.

Revenues

Morgan Stanley posted net revenues of $10.6 billion, which compared favorably with the year-ago number of $9.5 billion. The Zacks Consensus Estimate was $10 billion.

Key Q2 Statistics:
 

  • Net income applicable to Morgan Stanley was $2.4 billion, jumping 39% year over year
  • Sales & Trading revenue were $3.8 billion, increasing 19% year over year
  • Investment banking revenues were $1.7 billion, surging 21% from the prior-year quarter
  • Repurchased $1.25 billion worth shares during the quarter


Following the Federal Reserve’s approval of its capital plan, Morgan Stanley announced a 20% hike in quarterly dividend to 30 cents per share. Further, the company authorized $4.7 billion worth of share buyback plan.

What Zacks Rank Says

Morgan Stanley carries a Zacks Rank #3 (Hold). However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

How the Market Reacted So Far

Following the earnings release, Morgan Stanley shares were up almost 4% in the pre-trading session. This is in line with what the stock witnessed in the last day’s session. Clearly, the initial reaction shows that the investors have considered the results in their favor. The full-session’s price movement may indicate a different picture.

Check back later for our full write up on this Morgan Stanley earnings report!

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