MS Morgan Stanley

By Liz Hoffman 

Morgan Stanley said its first-quarter profit rose 38%, following other big Wall Street banks that got a boost from lower taxes and more-active markets.

Morgan Stanley reported Wednesday quarterly profits of $2.67 billion, or $1.45 a share, on revenue of $11.08 billion. Both were higher than a year ago and surpassed the average analyst estimates of $1.25 a share in earnings and $10.36 billion in revenue, according to Thomson Reuters.

Under Chief Executive James Gorman, Morgan Stanley is in the late innings of a revamp designed to make its revenue more predictable and decrease risk. It has doubled down on fee-based wealth-management services and eased its reliance on trading commissions and principal investment gains.

The firm in January set out new financial targets, most of which appear easily in reach, especially given the impact of the tax cuts.

Shares touched a 10-year high of nearly $59 in mid-March before sliding amid stock-market turmoil and fears of an escalating trade war. They remain up 1.5% this year, before Wednesday, and are rising 2.3% in premarket trading following the bank's results.

Expectations had been relatively high for the quarter, given improved results at rivals including JPMorgan Chase & Co. and Goldman Sachs Group Inc., which reported earnings Tuesday. Wall Street trading desks hummed as markets gyrated, while rising interest rates boosted the value of everything from adjustable mortgages to big corporate loans.

The market's wild ride in the first quarter aided Morgan Stanley's stock-trading, the biggest on Wall Street by annual revenues. JPMorgan reported a 26% year-over-year increase in stock-trading revenues, while Citigroup Inc. and Bank of America Corp. both reported 38% increases.

Morgan Stanley is smaller in fixed-income trading and more geared toward bond and loan trading than the "macro" products of currencies and interest rates, which went gangbusters early in the period.

Write to Liz Hoffman at liz.hoffman@wsj.com

(END) Dow Jones Newswires

April 18, 2018 07:15 ET (11:15 GMT)

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