Morgan Stanley (MS) beat estimates and reported first-quarter net income of $2.4 billion, or $1.18 a share vs. $1.5 billion, or $0.74 a share, a year earlier. Net revenues were $9.9 billion compared with $9.0 billion a year ago
Excluding certain adjustments, net revenues for the current quarter were $9.8 billion compared with $8.9 billion a year ago, while net income was $2.3 billion, or $1.14 a share, compared with $1.4 billion, or $0.70 a share a year ago.
Compensation costs, though, grew to $4.5 billion vs. $4.3 billion a year ago, while noncompensation expenses increased to $2.5 billion from $2.3 billion. Within Morgan Stanley’s wealth unit, both compensation and other costs were “relatively unchanged” from a year ago, according to the firm; they were $2.2 billion and $754 million, respectively.
“This was our strongest quarter in many years with improved performance across most areas of the firm,” said Chairman and CEO James Gorman, in a statement. “It reflects our ongoing strategy to build platforms for growth while maintaining a prudent risk profile and disciplined expense management.”
The Wealth Management unit reported net revenues were $3.8 billion, up 1% from the prior quarter and 6% from the earlier quarter. Net income improved 27% from the earlier period to $535 million; this represents a drop of 71% from last year, however, reflecting an unusual income-tax benefit in Q1’14.