Morgan Stanley’s stock ticks up after profit, revenue rise above expectations on strong trading performance

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Shares of Morgan Stanley inched up 0.1% in premarket trading Thursday, in the face of a broader market selloff, after the bank and broker reported third-quarter profit and revenue that rose above expectations as financial markets remained active through the summer months. Net income rose to $2.72 billion, or $1.66 a share, from $2.17 billion, or $1.27 a share, in the year-ago period, beating the FactSet earnings consensus of $1.28 a share. Total revenue increased 16.2% to $11.66 billion, topping the FactSet consensus of $10.65 billion, as net interest income grew 22.0% to $1.49 billion to top expectations of $1.20 billion. Among the business segments, investment banking revenue rose 11.2% to $1.71 billion to top the FactSet consensus of $1.70 billion, and sales and trading revenue grew 20.2% to $4.15 billion to beat expectations of $3.35 billion. Within sales and trading, equity revenue increased 13.4% to $2.26 billion to beat expectations of $2.19 billion and fixed income revenue jumped 34.5% to $1.92 billion to exceed expectations of $1.59 billion. “We delivered strong quarterly earnings as markets remained active through the summer months, and our balanced business model continued to deliver consistent, high returns,” said Chief Executive James Gorman. The stock’s gain comes as futures for the S&P 500 dropped 0.9%. The stock has lost 0.9% year to date through Wednesday, while the SPDR Financial Select Sector ETF has dropped 19.5% and the S&P 500 has gained 8.0%.
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