Morgan Stanley Earnings: Swing to a Loss After Two Straight Profit Quarters

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S&P 500 (NYSE:SPY) component Morgan Stanley (NYSE:MS) dropped to a fourth quarter loss, but results topped expectations. Morgan Stanley provides financial products and services to a group of clients and customers, including corporations, governments, financial institutions, and individuals.

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Morgan Stanley Earnings Cheat Sheet for the Fourth Quarter.

Results: Reported a loss of $227 million (14 cents per diluted share) in the quarter. The investment brokerage had net income of $871 million or 44 cents per share in the year earlier quarter.

Revenue: Revenue was $5.7 billion last quarter.

Actual vs. Wall St. Expectations: MS beat the mean analyst estimate of a loss of 58 cents per share. It beat the average revenue estimate of $5.57 billion.

Quoting Management: James P. Gorman, Chairman and Chief Executive Officer, said, “For the past year, Morgan Stanley has made enormous progress by addressing a number of outstanding strategic and legacy issues. These included the conversion of MUFG’s preferred investment into common stock and the settlement with MBIA. Importantly, we also achieved market share gains across our institutional businesses, as well as significant net flows into our Global Wealth Management and Asset Management platforms. We ended the year in better shape than where we started and we are well positioned to deliver improved returns to shareholders in 2012 and beyond.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 80 cents in the third quarter, by 25 cents in the second quarter, and by 12 cents in the first quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from 56 cents a share to 49 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $1.62 a share to 72 cents over the last sixty days.

Competitors to Watch: Goldman Sachs Group, Inc. (NYSE:GS), Citigroup Inc. (NYSE:C), Bank of America Corp. (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM), Deutsche Bank AG (NYSE:DB), UBS AG (NYSE:UBS), Mitsubishi UFJ Financial Group Inc (NYSE:MTU), Piper Jaffray Companies (NYSE:PJC), Jefferies Group, Inc. (NYSE:JEF), and General Electric Company (NYSE:GE).

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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