Morgan Stanley (MS) beat second-quarter estimates on Thursday, reporting total sales of $8.6 billion and net income from continuing operations of $1.9 billion, or $0.94 per share, vs. $1.0 billion, or $0.43 per share, a year ago. (It notes that last year’s EPS included “a negative adjustment” of about $151 million, or $0.08 per share, related to the purchase of a final stake in the Morgan Stanley Smith Barney joint venture.)
As for wealth management, the wirehouse’s pre-tax profit came in at 21%, a milestone for the unit, but still behind that of rival Bank of America-Merrill Lynch (BAC), which reported a pre-tax profit on Wednesday of 25% for the second quarter – its sixth consecutive period of 25%-plus results.
“Our quarterly results demonstrated solid performance, despite a muted operating environment,” said Morgan’s Chairman and CEO James Gorman, in a statement. “We are seeing momentum across our businesses, with particular strength in Investment Banking, Equity Sales & Trading and Wealth Management – where profit margins hit 21% for the first time since the founding of the [joint venture] and assets entrusted to us by clients reached $2 trillion.”
Still, the unit has room to catch up when it comes to other measures, as a deeper look at the Q2 numbers reveals.
Morgan Stanley’s wealth unit had pre-tax income of $767 million on net revenues of $3.7 billion. BofA’s group reported pre-tax income of $1.15 billion on net revenues of $4.56 billion; Merrill’s sales represented $3.80 billion or about 83% of the broader group’s results, which includes the operations of U.S. Trust.