Morgan Stanley Posts Solid Win in Q4

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Morgan Stanley (NYSE: MS) posted its fourth-quarter financial results before the markets opened on Tuesday. The company said that it had $0.81 in earnings per share (EPS) and $9.0 billion in revenue. The consensus estimates called for $0.65 in EPS and revenue of $8.47 billion. The same period of last year reportedly had EPS of $0.43 and $7.86 billion in revenue.

This bank is not the only major firm reporting on Tuesday. UnitedHealth reported profits as well as one of the Dow firms reporting this week.

At the end of the quarter, Morgan Stanley’s book value and tangible book value per common share were $36.99 and $31.98, respectively. The Common Equity Tier 1 and Tier 1 risk-based capital ratios under Advanced Approach transitional provisions were roughly 16.8% and 19.0%, respectively.

During the quarter, Morgan Stanley repurchased roughly $1.0 billion of its common stock, or 27 million shares. The firm also declared a quarterly dividend of $0.20 per share, which will be payable on February 15 for shareholders of record on January 31.

In terms of the individual business segments, Morgan Stanley reported:

  • Institutional Securities net revenues were $4.6 billion reflecting strong results across our Sales and Trading franchise and continued strength in M&A advisory.
  • Wealth Management net revenues were $4.0 billion and pre-tax margin was 22%. Fee-based asset flows for the quarter were $17.1 billion.
  • Investment Management reported net revenues of $500 million with assets under management or supervision of $417 billion.

James P. Gorman, board chair and chief executive, commented:

Our quarterly results reflect consistent strong performance, while our annual results show meaningful earnings growth over 2015. We reported solid results in Sales & Trading and Advisory, and record revenues in Wealth Management, while managing expenses prudently. We are optimistic about opportunities in 2017 and beyond and remain focused on serving our clients and achieving our strategic objectives.

Shares of Morgan Stanley closed Friday at $43.81, with a consensus analyst price target of $45.59 and a 52-week trading range of $21.16 to $44.60. Following the release of the earnings report, the stock was up about 0.6% at $44.05 in early trading indications Tuesday.