Morgan Stanley Q2 profits surge, wealth management unit disappoints

Morgan Stanley reported better-than-expected quarterly earnings on Tuesday morning on the back of a strong trading and investment banking performance.

Morgan Stanley said quarterly revenues rose 12% to $15.02bn, while profits surged 41% to $3.08bn. Earnings per share were $1.82 each, ahead of Wall Street estimates of $1.65 each.

Equity trading made up much of the outperformance, with revenue up 18% to $3.02bn, while investment banking revenue shot up 51% to $1.62bn and fixed income trading revenues grew 16% to $1.99bn.

Morgan Stanley's wealth management business, on the other hand, fell short of expectations, with revenues rising 2% to $6.79bn but missing Wall Street estimates of $6.88bn. Interest income in the unit also disappointed, down 17% year-on-year at $1.79bn.

"The firm delivered another strong quarter in an improving capital markets environment," said chief executive Ted Pick. "We continue to execute on our strategy and remain well positioned to deliver growth and long-term value for our shareholders."

As of 1345 BST, Morgan Stanley shares were down 2.81% in pre-market at $102.30 each.

Reporting by Iain Gilbert at Sharecast.com