Morgan Stanley 2Q profit falls 9 percent

Analysts on average had expected earnings of 74 cents per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the reported figures were comparable.

The bank has beaten earnings per share estimates in 10 of the past 12 quarters, according to Bloomberg.

In last year’s second quarter, net earnings were 92 cents per share and net revenue was $8.6 billion excluding DVA.

European markets cheered Greece as it made crucial repayments to the European Central Bank and worldwide Monetary Fund worth 6.25 billion euros ($6.8 billion) on Monday. Excluding accounting adjustments, revenue was $9.56 billion, more than the $9.10 billion analysts had expected. The Company operates in three segments: Institutional Securities, Global Wealth Management Group and Asset Management. Wealth management also performed strongly in the second quarter, though its revenue growth rate was a more subdued 5%.

The bank’s revenue from investment banking, which includes advising on takeovers and underwriting equity and bond issues, fell 1 percent to $1.61 billion.

Adjusted equities trading revenue jumped 27 percent to $2.27 billion, beating arch rival Goldman Sachs Group Inc’s (GS.N) $2 billion in revenue from that business in the period. Fixed-income revenue fell 31% from the first quarter, seasonally a strong part of the year for trading, while equities trading gained 2% sequentially. Morgan Stanley’s trading revenue totalled US$3.5 billion in the quarter, up 32 per cent from a year ago.

Pruzan, who replaced Ruth Porat in March after she left for a similar role at Google Inc, also said the bank had received “positive feedback” from clients on a Moody’s upgrade of the bank’s credit ratings in May.

Profit in Morgan Stanley’s wealth-management arm before taxes was $885 million, up 16% from the $763 million it reported a year ago. The 12-month price target for the stock is $41.20, suggesting a 2.48% upside over the last closing price, which was $40.20.

After a strong 2014, shares in Morgan Stanley have risen around 3.5 per cent since the start of 2015 compared with a 6.7 per cent increase in the KBW index of bank stocks over the same period. Morgan Stanley executives have pledged to lift return on equity above 10%. It’s $1.9 billion. Over the previous eight quarters, Morgan Stanley has beat the Street on its bottom-line seven times.