Morgan Stanley (MS) reported a first-quarter loss of $119 million, or 6 cents a share, compared with last year’s profit of $736 million, or 50 cents a share, on Thursday. The loss was due mainly to a debt valuation adjustment.
Excluding that adjustment, the operating income attributable to the bank was $1.4 billion, or 71 cents a share – topping earnings estimates of 44 cents.
The number of Morgan Stanley Smith Barney advisors dropped 2% from last quarter and 5% from last year to 17,193, while total assets under management hit nearly $1.75 trillion, a jump of 7% from the previous quarter and a 2% increase from last year. (It had 17,512 advisors in the fourth quarter of 2011 and 18,124 in the first quarter of 2011.)
“This quarter is further evidence that Morgan Stanley has rebounded from the financial crisis of 2008 and is in a significantly stronger position,” said Chairman and CEO James P. Gorman, in a statement. “Revenues of $8.9 billion, excluding the impact of [the $2 billion debt valuation adjustment], were higher on both a year-over-year and a quarter-over-quarter basis.”
As for the wealth-management unit, “We are intensely focused on completing the transition of Morgan Stanley Smith Barney to the new, state-of-the-art technology platform this summer …,” Gorman said.
Morgan Stanley’s global wealth management business, which includes the MSSB joint venture, reported net revenue of $3.4 billion. Its pre-tax profit margin of 11% was up slightly from a year ago and from the previous quarter.