Morgan Stanley (MS) , the U.S. brokerage firm, said fourth-quarter profit from continuing operations tumbled 25% as the firm's bond-trading division suffered along with rival Wall Street firms through turbulent financial markets.
Net income was $1.53 billion, the New York-based bank said Thursday in a press release. Earnings per share were 80 cents, missing the average analyst estimate of 89 cents in a FactSet survey.
Net revenue fell by 10% 10% to $8.55 billion, Morgan Stanley said.
In the press release, CEO James Gorman described the quarter as "challenging."
Shares fell 4.4% to $42.53 at the close of trading on Thursday.
Revenue in the fixed-income division, which includes bond trading as well as foreign exchange and commodities, fell by 30% from a year earlier to $564 million, due to deterioration in corporate bonds and volatile interest rate movements. The deterioration was worse than the 20% decline predicted by analysts at brokerage firm Keefe, Bruyette & Woods.
Stock-trading revenue was roughly unchanged from a year earlier at $1.9 billion. The KBW analysts had projected a 7% increase.
The wealth management division, consisting of Morgan Stanley's force of 15,694 representatives, suffered a 6% decline in revenue to $4.144 billion.