Morgan Stanley (NYSE: MS) stock rose 6.61% on January 16th, 2020 (Source: Google finance) after the company delivered better than expected results for the fourth quarter of FY 19 and each of its three main businesses produced more revenue than expected. The bank’s fourth-quarter profit has surged 46% to $2.24 billion. Further, the company got the benefit of a $158 million on tax and severance costs of $172 million. The stock kept upbeat momentum rising over 1% on January 17th, 2020 (as of 11:10 am GMT-5; Source: Google finance).
Bond trading boosted the firm’s institutional securities division to a 32% increase in revenue to $5.05 billion, compared to the $4.46 billion estimate. Fixed income trading delivered $1.27 billion in revenue, compared to the estimate of $933.5 million. Equity trading revenue was in line with the expectations at $1.92 billion, as did investment banking at $1.58 billion. At the firm’s wealth management division, revenue grew by 11% to $4.58 billion, surpassing the $4.39 billion estimate as rising markets improved asset and transaction levels. The investment management business delivered $1.36 billion in revenue, which is almost 100% more than a year earlier and exceeding the $783.2 million estimate by more than a half billion dollars. The strong result of this business is on back of a single investment, in which Morgan Stanley cited $670 million in investment revenue (a 720% increase from a year earlier) on the carried interest from an IPO in Asia. Meanwhile, Morgan Stanley’s wealth business now is generating about three times as much daily revenue as it did five years ago, and its securities business has captured the market share from rivals at a time when industry revenue has shrunk.
MS in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.30, beating the analysts’ estimates for the adjusted earnings per share of 99 cents, according to analysts surveyed by Refinitiv. The company had reported the adjusted revenue growth of 27 percent to $10.86 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $9.72 billion.
Additionally, the company has repurchased $1.5 billion of its outstanding common stock during the fourth quarter 2019 as part of its Share Repurchase Program. During the year 2019, the company had repurchased $5.4 billion of its common stock or approximately 121 million shares. The company had also declared a $0.35 quarterly dividend per share, which will be payable on February 14, 2020 to common shareholders of record on January 31, 2020.