Morgan Stanley profit falls on compensation costs

“They continue to show expense discipline and revenue are going to hang in there better than many expected”, Sandler O’Neill analyst Jeffery Harte said.

Profits jumped at the bank’s institutional investment division, which includes its investment bank, and its stock, bond and commodities trading desks. Morgan Stanley was the only big bank to report a jump in trading revenue.

The firm enjoyed another big quarter in stock trading, long the stronger sibling compared with fixed income.

Morgan Stanley’s long-term issuer rating was the only one of the major banks that Moody’s raised two levels in May, as the company cited the company’s strengthened capital and lower earnings volatility.

Fixed income & commodities sales and trading net revenues surged 30% to $1.3 billion from $1 billion a year ago. Analysts have opined that the financial firm has managed to stay ahead of competition by strategically growing its brokerage business, thereby avoiding systemic slowdown that has raked its peers on Wall Street.

As of this writing, shares of Morgan Stanley were up 2.9% at $41.40 per share in premarket trading.

The bank reported net profit of $1.7bn (£1.1bn) in the three months to June, down from $1.8bn a year earlier.

Still, when not counting a tax benefit and other items, the banking giant beat estimates, bringing in 79 cents a share versus the 74 cents predicted by analysts. Morgan Stanley executives have pledged to lift return on equity above 10%.

Revenue from investment banking, which includes advising on takeovers and underwriting equity and bond issues, fell 1 percent to $1.61 billion. Wealth management also performed strongly in the second quarter, though its revenue growth rate was a more subdued 5%.

The company, which had 112,000 employees as of December 31, said it expects to complete the review in 2015.

The results, coupled with strong gains in its stock-trading business, helped boost Morgan Stanley’s second-quarter profit above analysts’ estimates.

United States weapons makers have been increasing sales to global markets to offset weak government spending at home. Lennox Intl net climbed 10%.

“The CEO said: “…I admire the question, but we’re obviously I wouldn’t talk about deals on a call or corporate strategy like that.

Huawei will release figures for its smartphone business later this week, a company spokesman said. Gorman has set a target of 22-25 per cent for the business this year. Chinese upstart and media darling Xiaomi followed with a 13.7 market share and Huawei was third with 11.4%, IDC said. ONE Gas, Inc. Common Stock is up 4.19% in the last 3-month period. The Insider information was divulged by the Securities and Exchange Commission in a Form 4 filing.