On Thursday, global financial services company Morgan Stanley delivered its fourth-quarter earnings report that surpassed most expectations from investors and analysts. The company’s shares rallied on strong earnings with tax bill related charges excluded from the reported numbers despite a decline in their fixed-income trading revenue similar to other American financial institutions and banks.
For the fourth quarter, the company delivered earnings of $0.84 cents per share beating most expectations of $0.77 per share from analysts. This is slightly lower than Morgan Stanley’s earnings of $0.93 per share during the previous quarter.
The revenue of the company also was higher for the quarter with the company posting $9.5 billion compared to most expectations of $9.2 billion in terms of revenue.During the third quarter, Morgan Stanley announced an increase of 9% in their net wealth management revenue to $4.22 billion. Overall revenue of the company from the previous quarter came in at $9.197 billion.
Morgan Stanley chief executive James Gorman stated during the earnings report that the company was able to its strategic objectives which were outlined two years ago over the year 2017. Gorman also reported that Morgan Stanley’s pretax earnings rose by 18% in the year 2018 led by a revenue growth of 10% as well as growth in all of Morgan Stanley’s business segments.
Gorman also added that the strong expense discipline from the company represents the operating leverage of the company leading to the company’s start of the year with a strong momentum led by the U.S. tax reform, growing interest rates and an evolving regulatory framework.
However, the revenue of the company from its fixed-income sales and trading fell further this quarter by 46% to $808 million along with other financial institutions on Wall Street similar to that of Goldman Sachs whose fixed-income trading revenue fell by 50% for the fourth quarter.
The company also reported total profits of $7.08 billion for the whole year representing an impact of $3.60 in terms of tax while the performance of the bank in terms of assets stood at 9.4% excluding tax charges.
Shares of the company which has rallied by more than 4% this year traded up by almost 1% during the trading session on last week following the release of its recent earnings report.
This year, the company expects a bullish direction for its shares compared to the performance of Morgan Stanley in the market last year. The stock market volatility is also expected by the company to return this year as the economy recovers and grows supported by higher interest rates and strong earnings forecasts across a number of sectors.