Morgan Stanley slips as wealth management revenue disappoints

Morgan Stanley (NYSE:) reported third-quarter results that beat analyst estimates on top and bottom line, however, its shares fell 1.6% on weaker-than-expected wealth management revenue.

The company earnings per share of $1.38, which is $0.06 better than the estimated EPS of $1.32. In terms of revenue, the quarter generated $13.3 billion, slightly exceeding the consensus estimate of $13.25 billion.

However, wealth management net revenue came in at $6.4 billion, trailing the expected $6.58 billion. Moreover, the company’s net interest income stood at $1.98 billion, slightly below the estimated $2.06 billion.

Equities sales & trading revenue was $2.51 billion while FICC (Fixed Income, Currencies, and Commodities) sales & trading revenue came in at $1.95 billion. Analysts were looking for $2.41 billion and $1.83 billion, respectively.

James P. Gorman, chairman and chief executive officer, said, “While the market environment remained mixed this quarter, the Firm delivered solid results with an ROTCE of 13.5%. Our Equity and Fixed Income businesses navigated markets well, and both Wealth and Investment Management produced higher revenues and profits year-over-year.”

“We completed the integration of E*TRADE in the quarter, further executing on our strategy of building revenue synergies across channels and attracting clients to our best-in-class advice offering. Our ability to gather assets, together with our strong capital position and leading client franchises, position us to deliver continued growth and strong shareholder returns going forward.”