Morgan Stanley (NYSE:MS) posted second-quarter results on Thursday that were below analysts’ expectations, hurt by weaker-than-expected investment banking revenue.
Earnings per share came in at $1.39, compared to the expected $1.53. Revenue was $13.13 billion vs. $13.48 billion expected.
Profit dropped 29% to $2.5 billion, or $1.39 per share from $3.69 billion, or $2.02 per share, a year ago, the New York-based bank said. Revenue fell 11% to $13.13 billion from $14.8 billion, driven by the steep 55% decline in investment banking revenue.
The results confirm what some analysts had feared for Morgan Stanley, which runs one of the larger equity capital markets operations on Wall Street.
The firm’s investment banking division produced $1.07 billion in second-quarter revenue, $400 million below analysts’ $1.47 billion estimate that itself had been ratcheted down in recent weeks.
Wall Street banks are grappling with the collapse in IPOs and debt and equity issuance this year, a sharp reversal from the deals boom that drove results last year. The change was triggered by broad declines in financial assets, pessimism over the possibility of a recession and the Russian invasion of Ukraine.
Equities trading produced $2.96 billion in revenue in the quarter, above the $2.77 billion estimate, while fixed-income trading revenue of $2.5 billion handily exceeded the $1.98 billion estimate.
Shares of the bank have dropped 24% this year through Wednesday, worse than the 19% decline of the KBW Bank Index.
MS shares tumbled $2.72, or 3.6%, to $72.26
