Morgan Stanley 2Q profit falls 8.5 percent

United States investment bank Morgan Stanley has reported a better-than-expected second-quarter profit thanks to a strong performance by its wealth management division.

At least 19 teams managing some $3.8 billion in assets left the firm in the second quarter, according to InvestmentNews’ Advisers on the Move database.

Net income in the quarter declined 5.3% to $1.8 billion or 85 cents per diluted share compared to $1.9 billion or 92 cents from the same quarter past year.

Overall revenues at the bank rose to $9.7bn in the period, against $8.6bn a year ago.

Still, analysts continued to press Morgan Stanley about the growth of its fixed-income business as there were several reports during the last quarter that suggested the bank was ready to make a big push in trading.

Within trading, revenue from bonds, foreign-exchange and commodities was up 30% to $1.38 billion and revenue from equities was up 28% to $2.34 billion.

Shares of Morgan Stanley (NYSE:MS) rose by 4.04% in the past week and 2.11% for the last 4 weeks.

As we’ve mentioned previously, even if traders are performing, Morgan Stanley seems more reluctant than its rivals to increase risk parameters for its traders. “We remain focused on delivering the long-term value of this franchise”, said Mr Gorman.

Morgan Stanley chief financial officer Jonathan Pruzan, noted that “the market and our competitors are going through significant challenges” as they face restructuring. Year-to-date, shares are up over 3%. Mr Pruzan said in an interview that Morgan Stanley had a “high level of engagement with clients” during the quarter, but that sometimes results can be lumpy, depending on when deals close. During the same quarter in the previous year, the company posted $0.60 earnings per share.

The results capped a robust quarter for big USA banks – Goldman Sachs Group excepted – although many relied more on cost cuts and lower legal expenses than Morgan Stanley, which achieved strong results in most of its businesses.

Lennox global Inc (LII) soared 9.4% or $10.10 to $117.69 after the climate control solutions provider stated revenues in the second-quarter ending in June increased 3% to $992.5 million from a year ago period. The quarter’s pre-tax margin was 23 percent.

On an adjusted basis, the bank earned 79 cents per share – beating the average analyst estimate by 5 cents, according to Thomson Reuters I/B/E/S.

The bank repurchased approximately $625 million of its common stock, or approximately 16 million shares, in the second quarter.