Morgan Stanley posts $1.8 billion profit in second quarter

Revenue from investment banking, which includes advising on takeovers and underwriting equity and bond issues, fell 1 per cent to $US1.61 billion.

Overall, the firm earned $1.8 billion in profits, or 85 cents a share, down from $1.9 billion a year earlier.

Hasbro, Inc (HAS) gained 2.9% or $2.30 to $80.55 after the toys and entertainment products maker said net revenue in the second-quarter ending on June 28 slipped 3.8% to $797.7 million from a year ago period.

This May, after a review of 13 global investment banks, Moody’s analysts upgraded their outlook on Morgan Stanley, citing the institution’s transformation of its business and resulting outlook for profitability.

Excluding debt valuation adjustment or DVA, adjusted net income for the quarter was $1.69 billion or $0.79 per share, compared to $1.23 billion or $0.58 per share in the year-ago quarter.

Results benefited from growth in fixed-income, currency and commodities (“FICC”) trading income as well as higher sales and trading net revenues.

Morgan Stanley reported second-quarter earnings on Monday that beat on the top and bottom lines.

Profit in Morgan Stanley’s wealth-management arm was $561 million compared with $471 million past year.

The bank added wealth management revenues jumped 5.4% to $3.9 billion from $3.7 billion and revenues in investment management segment climbed 6.5% to $751 million from $705 million.

“We delivered a strong quarter across each of our businesses”, Morgan Stanley CEO James Gorman said in a statement.

“The stability of our fee-based businesses gives us comfort that a large portion of business offers us a more predictable outlook”, Gorman said on a call with analysts on Monday. Its shares last traded 0.3 percent weaker.

Most of the analysts covering Morgan Stanley have a neutral stance regarding the stock’s long-term prospects.

On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $0.74 per share for the quarter. The consensus estimate for third-quarter adjusted EPS is $0.72 on revenues of $8.83 billion.

“Any increase in USA interest rates should further strengthen the dollar, prompting more fund outflows from commodities, metals and emerging-market assets”, Vattana Vongseenin, the chief executive officer of Phillip Asset Management in Bangkok, told Bloomberg.

Institutional Securities (IS): Pre-tax income from continuing operations was $1.62 million, up 69% from the prior-year quarter. This is a loss of 144 advisors from the previous quarter and down 545 advisors reported with the firm a year ago.

Yet advisor headcount continued to decline, with the firm reporting 15,771 advisors at the end of the second quarter.