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April 18, 2016 at 10:39 AM
Morgan Stanley (MS) said Monday that its net income fell 53% in the first quarter to $1.1 billion, or $0.55 per share, vs. $2.4 billion, or $1.18 per share, last year. Revenue declined 21% year over year to $7.79 billion.
The company adds that last year’s Q1 results included a tax benefit of $564 million or $0.29 per share. (Earnings beat analysts estimates, though sales fell short.)
“Obviously, 2016 got off to a difficult start,” said Chairman & CEO James Gorman on a call with investors, adding that “retail activity was extremely subdued.”
Despite the “more challenging revenue environment,” Gorman explained, “all was not lost. Wealth Management generated a pretax margin greater than 21% …, [and] we made real progress in our expense discipline …”
Morgan Stanley’s Institutional Securities business, its largest, had a 66% drop in net profits to $591 million vs. last year, as revenue slumped 32% to about $3.7 billion.
In investment banking, the volume of IPOs was down 82% quarter over quarter, CFO Jonathan Pruzan said during a conference call with equity analysts.
Wealth Management’s net income declined 8% from last year to $493 million. Sales weakened about 4% from the year-ago quarter to $3.67 billion.
In addition, the average yearly fees and commissions for its financial advisors, which number 15,888, declined by 4% from last year to $923,000. Total assets for the unit dropped slightly, 2%, to about $2 trillion.
