Morgan Stanley (NYSE: MS) shares displayed muscle in Wednesday trade, as the company crushed profit expectations on trading and investment banking results that exceeded analysts' expectations.
The New York-based company said profit surged 39% to $2.44 billion in the second quarter from a year earlier, exceeding the $2-billion estimate of analysts. Earnings per share of $1.30 exceeded the $1.11 estimate.
Revenues climbed 12% to $10.6 billion, about $500 million more than analysts expected.
In the bank's equities division, the biggest on Wall Street, the firm delivered $2.5 billion in revenue on good performance across all products, especially financing, compared with the $2.29 billion estimate.
Its bond-trading department produced $1.4 billion, compared with the $1.29 billion estimate, on higher results in commodities and credit.
Investment banking, which includes deal advisory and stock and bond issuance, generated $1.7 billion in revenue, compared with the $1.54 billion estimate. The business exceeded expectations across deal-making and capital markets units.
Said CEO James Gorman, "We reported robust revenue and earnings growth this quarter with strength across all businesses and geographies.
"Our strong global franchise positions us well to continue to grow organically across each of our businesses and to deliver operating leverage."
Still, revenues in wealth management and investment management were slightly below expectations. Wealth management produced $4.3 billion in revenue, compared to the $4.43-billion estimate, as the company said transactional revenues declined by almost 10% thanks to lower fixed income results
Shares in MS vaulted $1.41, or 2.9%, to $50.59 early Wednesday.
