Morgan Stanley’s fourth-quarter revenue beat forecasts by a wide margin with a boost from its fixed-income underwriting, as the bank’s new Chief Executive Ted Pick took the reins of the storied Wall Street name.
Pick said the bank’s return on average tangible equity for 2023 of 12.8% was “solid against a mixed market backdrop and a number of headwinds.”
Morgan Stanley’s
MS,
fourth-quarter profit dropped by 35% and fell short of Wall Street estimates when including one-time items.
Morgan Stanley stock dropped by 3.1% as financial stocks moved into the red on Tuesday.
Net income applicable to Morgan Stanley common shareholders shrank by about a third to $1.38 billion, or 85 cents a share, from $2.11 billion, or $1.26 a share, in the year-ago quarter.
The latest quarter includes a one-time charge of 28 cents a share related to the bank’s shares of the Federal Deposit Insurance Corp.’s special assessment for last year’s bank failures.
Morgan Stanley fell short of the FactSet consensus estimate of $1.07 a share. Breaking out the one-time charge, earnings would have been $1.13 a share, ahead of the analyst mark.
Revenue grew 1.2% to $12.9 billion, to beat the FactSet consensus of $11.93 billion.
Investment banking revenue increased 5%, as fixed income underwriting revenue jumped 25% while advisory and equity underwriting revenue were flat.
Elsewhere, equity, fixed income and wealth management revenue were “essentially unchanged.”
Ted Pick took over from retiring James Gorman at the start of 2024.
Prior to Tuesday’s moves, the stock has climbed 13.9% over the past three months through Friday, while the Financial Select Sector SPDR ETF
XLF,
has advanced 12% and the S&P 500
SPX,
has gained 9.4%.
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