Morgan Stanley (MS) said Tuesday that it had net income of $2.2 billion, or $1.14 per share, from continuing operations compared with income of $314 million, or $0.05 per share, for the same period a year ago, beating analysts’ estimates.
Net revenues were $9.9 billion for the current quarter compared with $6.8 billion a year ago. Results for the quarter included revenue of $3.4 billion, or $1.12 per share, compared with negative revenue of $731 million a year ago related to changes in Morgan Stanley’s debt-related credit spreads and other credit factors, such as a debt valuation adjustment.
For the current quarter, net income applicable to Morgan Stanley, including discontinued operations, was $1.15 per diluted share, compared with a net loss of $0.07 per diluted share in the third quarter of 2010.
The wealth-management group had net revenues of $3.3 billion, with net new assets for the quarter of $15.5 billion, a record since the inception of the Morgan Stanley Smith Barney joint venture (MSSB), according to the company, and net flows in fee-based accounts of $10.1 billion.
The quarter’s pre-tax margin improved to 11% from 9% a year ago and in the previous quarter.
“Morgan Stanley effectively navigated turbulent markets while consolidating our market share gains with institutional clients and demonstrating resilience across the global wealth-management business as evidenced by record net new assets flows since the formation of MSSB,” said President and CEO James P. Gorman, in a statement.
The wealth-management unit — which continues to prune lower-producing advisors — had pre-tax income from continuing operations of $362 million in the third quarter, up 12% from the previous quarter and 29% from the year-ago period.
Income after the noncontrolling interest allocation to Citigroup for the Morgan Stanley Smith Barney joint venture, $52 million, and before taxes was $310 million.
Net income after these adjustments and taxes was $169 million in the third quarter, representing a 6% drop from the second quarter but a 17% increase for the year-ago period.
Net revenues of $3.3 billion declined 6% from last quarter but increased 5% from $3.1 billion a year ago “primarily reflecting higher asset management revenues and commissions partly offset by net losses from investments associated with the firm’s deferred compensation and co-investment plans,” the company said in a press release.