Morgan Stanley (NYSE:MS) on Thursday posted first-quarter profit that missed analysts’ expectations and warned that a sole bright spot for the industry, robust trading results, may prove to be fleeting.
The U.S. banking giant said in a release that earnings dropped 30% to $1.7 billion, or $1.01 a share, compared with the $1.14 estimate of analysts.. Company-wide revenue of $9.49 billion was also below the $9.73 billion estimate. Morgan Stanley shares dipped about 2.4% in early trading.
Morgan Stanley said that the coronavirus pandemic impacted each of its major businesses, creating turmoil in financial markets that hit the value of loans, investments and some trading assets, and sapped interest income and investment banking fees.
At the start of 2020, that was partly offset by robust trading results that benefited from the sudden surge in volatility, but the bank warned that that boost could peter out as the crisis wears on.
As it was at rival banks, trading results were strong: Revenue jumped 30% from a year earlier, and fixed income desks generated $2.2 billion in revenue, half a billion dollars more than expected. Equities desks also outperformed, making $2.42 billion in revenue, almost $200 million more than expected.
Investment banking revenue slipped 1% to $1.14 billion, below the $1.26 billion estimate, as higher debt issuance couldn’t entirely make up for lower activity in IPOs and lower demand for M&A advice.
MS shares shed 46 cents, or 1.2%, to $37.94.
