Morgan Stanley Q2 trail earnings consensus as volatile markets take their toll (NYSE:MS)


Morgan Stanley (NYSE:MSstock is dipping 1.2% in Thursday premarket trading after its Q2 earnings missed consensus, as revenue from its Investment Banking and Investments divisions dropped sharply both Q/Q and Y/Y due to volatile markets.

Strong results in Equity and Fixed Income helped counter weaker investment banking activity. We continue to attract positive flows across our Wealth Management business, and Investment Management continues to benefit from its diversification,” said Chairman and CEO James Gorman.

Q2 adjusted EPS of $1.44 vs. the average analyst estimate of $1.61 and compared with $2.06 in Q1 2022 and $1.89 in Q2 2021.

Return on tangible equity of 13.8% vs. 19.8% in Q1 and 18.6% in the year-ago quarter.

Q2 total non-interest revenue of $10.9B fell 14% from Q1 2022 and 16% from Q2 2021. By segment:

  • Investment Banking — $1.15B dropped 35% Q/Q and sank 55% Y/Y;
  • Trading — $3.60B, down 10% Q/Q and rose 8% Y/Y;
  • Investments — $23M, plummeted 69% Q/Q and 94% Y/Y;
  • Commissions and fees — $1.22B dropped 14% Q/Q and 7% Y/Y ;
  • Asset Management — $4.91B slipped 4% Q/Q and 1% Y/Y.

Provision for credit losses increased to $101M from $57M in Q1 and $73M in Q2 2021.

Compensation expenses of $5.55B vs. $6.27B in Q1 and $6.42B in Q2 2021.

Total non-compensation expenses of $4.16B vs. $3.88B in the previous quarter and $3.70B in the year-ago quarter.

Conference call at 9:30 AM.

Earlier, Morgan Stanley non-GAAP EPS of $1.44 misses by $0.17, revenue of $13.1B misses by $400M

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