Morgan Stanley jumps after reporting better than expected fourth-quarter earnings (MS)


Total fourth quarter revenues were $9.5 billion, Morgan Stanley reported.

Morgan Stanley is the last to report of the big U.S. banks, and like the others, its non-adjusted earnings took a one-time hit from tax reform.

Morgan Stanley (NYSE:MS) released its earnings report for the fourth quarter of 2017 on Thursday.

Gorman has for years been shifting Morgan Stanley away from risky, volatile businesses that crippled the bank during the 2007-2009 financial crisis, and expanding areas that generate consistent fees, like investment banking and wealth management. Analysts on average were looking for 77 cents per share, according to Thomson Reuters I/B/E/S. Shares of other major banks were flat on Thursday morning.

Wealth management revenue grew to $4.4 billion from $4 billion a year ago.

Morgan Stanley earned $686 million, or 29 cents a share, down from $1.67 billion, or 81 cents a share, from a year earlier. Morgan Stanley recorded a one-time $1.2 billion tax provision, the smallest among the banks.

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Its longtime bet on the steady-as-she-goes business continues to bear fruit, assisted by a rising stock market that has lifted the value of client assets and respectively, the fees earned by the bank.

JPMorgan took a 37 percent hit to quarterly profit due to a $2.4 billion charge related to the tax law, while Citigroup flagged a $19 billion write-down, and posted a $18-billion quarterly loss on Tuesday.

But analysts appeared disappointed by some of his new targets, repeatedly characterizing his latest wealth management goal as conservative and asking why he would not aim higher. Earnings per share and revenue were$2.88 and $34.63 billion in 2016.

Morgan Stanley reported revenue of $9.50 billion for the fourth quarter of 2017. Sales and trading revenue fell to $2.7 billion in the fourth quarter from $3.2 billion a year ago. The firm's return on common equity, which measures how well the bank is performing with the assets it has, was 9.4 percent excluding the tax charges.

However, like Goldman Sachs earnings showed Wednesday, Morgan Stanley's trading revenues were disappointing.

Morgan Stanley (NYSE:MS)'s EPS growth this year is 0.20% and the trailing 12-month EPS is $3.62.