Morgan Stanley reported a net loss of $0.38 per share for the second quarter on Tuesday vs. a gain of $0.80 a year ago. The loss, along with revenue of $9.3 billion vs. $8 billion a year ago, topped analysts’ estimates for the recent period.
Earnings per share for Q2 included a negative adjustment of about $1.7 billion, or $1.02 per share, related to Morgan Stanley’s conversion of preferred stock, held by Mitsubishi UFJ Financial Group, into common stock.
In the global wealth management, continued cuts to the advisor force contributed to improvements in both average revenue (or fees and commissions) per advisor and average assets under management per FA.
The wealth unit had net revenues of $3.5 billion, client assets of $1.7 trillion and 17,638 advisors worldwide. Net new assets for the quarter were $2.9 billion with net flows in fee-based accounts of $9.7 billion.
Wealth management “delivered its highest revenues and FA productivity since the MSSB joint venture was formed and had positive flows, as did asset management,” said President and CEO James Gorman in a press release. “With respect to costs, our re-engineering initiative and additional expense-management efforts underscore our focus to ensure that shareholders benefit from our progress.
Cutting Reps, Raising Results
Net revenues for the global wealth unit were $3.5 billion, up 13% from a year ago and 1% from the previous quarter, “primarily reflecting higher asset-management revenues and gains on securities held for sale,” according to the company.
Morgan Stanley also says that, with the exception of 2Q10, revenues have increased each quarter following the MSSB joint venture’s inception in 2Q09.