Morgan Stanley beats by $0.16, beats on revs
- Reports Q4 (Dec) earnings of $0.81 per share, $0.16 better than the Capital IQ Consensus of $0.65; revenues rose 16.6% year/year to $9.02 bln vs the $8.51 bln Capital IQ Consensus.
- Institutional Securities reported pre-tax income from continuing operations of $1.3 bln compared with pre-tax income of $548 mln a year ago, or $672 mln excluding DVA. Net revenues for the current quarter were $4.6 bln compared with $3.4 bln a year ago, or $3.5 bln excluding DVA.
- Sales and Trading net revenues of $3.2 bln increased from $2.3 bln a year ago: Equity sales and trading net revenues of $2.0 bln increased from $1.8 bln a year ago reflecting solid results across products and regions, with particular strength in derivatives. Fixed Income sales and trading net revenues of $1.5 bln increased from $550 mln a year ago reflecting higher results across products on improved market conditions compared with the prior year period.
- Wealth Management reported pre-tax income from continuing operations of $891 mln compared with $768 mln in the fourth quarter of last year. The quarter's pre-tax margin was 22%. Net revenues for the current quarter were $4.0 bln compared with $3.8 bln a year ago.
- Asset management fee revenues of $2.2 bln increased from $2.1 bln a year ago reflecting market appreciation and positive flows.
- Investment Management reported pre-tax income from continuing operations of $28 mln compared with $123 mln in the fourth quarter of last year. Net revenues of $500 mln decreased from $621 mln in the prior year, reflecting losses of ~$60 mln on sales and markdowns of legacy LP investments in third party sponsored funds in the current quarter compared with investment gains in the prior year period.
- Asset management fees were essentially unchanged from a year ago. Compensation expense for the current quarter of $249 mln decreased from $278 mln a year ago.
- ROE 8.7%; flat Q/Q.
- At December 31, 2016, book value and tangible book value per common share were $36.99 and $31.98, respectively, based on ~1.9 bln shares outstanding.