Morgan Stanley Posts Solid Earnings Beat in Q2

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Morgan Stanley (NYSE: MS) reported its second quarter financial results before the markets opened on Wednesday. The company said that it had $0.87 in earnings per share (EPS) and $9.5 billion in revenue, versus consensus estimates from Thomson Reuters that called for $0.76 in EPS and $9.09 billion in revenue. The same period from last year had $0.75 in EPS and $8.91 billion in revenue.

In terms of its business segments the investment bank reported:

  • Institutional Securities had revenues of $4.75 billion.
  • Wealth Management had revenues of $4.15 billion.
  • Investment Management had revenues of $665 million.

Common Equity Tier 1 and Tier 1 risk-based capital ratios under Advanced Approach transitional provisions were approximately 16.6% and 18.9%, respectively.

At the same time, book value and tangible book value per common share were $38.22 and $33.24, respectively.

The bank announced a share repurchase of up to $5 billion of common stock beginning in the third quarter of 2017 through the end of the second quarter of 2018. The board of directors also declared a $0.25 quarterly dividend per share, payable on August 15, to common shareholders of record on July 31, 2017.

James P. Gorman, Chairman and CEO, commented:

Our second quarter results demonstrated the resilience of our franchise in a subdued trading environment. Our wealth management business produced a 25% margin and our strong investment banking results attest to the diversity of our global business. We continue to deliver on our strategic goals and grow shareholder returns.

Shares of Morgan Stanley closed Tuesday at $45.14, with a consensus analyst price target of $48.78 and a 52-week range of $27.79 to $47.33. Following the release, the stock was up 2.8% at $46.41 in early trading indications Wednesday.