Morgan Stanley Blasts Q2 Earnings Forecasts, Following Wall Street Rivals With Trading Revenue Surge

Morgan Stanley said its credit loss provisions fell to just $246 million over the second quarter, compared to the first three months of the year, while trading revenues from its fixed income and equity divisions surged.

Morgan Stanley Inc.  (MS) - Get Report posted stronger-than-expected second quarter earnings Thursday as trading revenues surged and bad loan provisions fell from the first three months of the year. 

Morgan Stanley said earnings for the three months ending in June were pegged at $1.96 per share, up 60% from the same period last year and firmly ahead of the Street consensus forecast of $1.12 per share . Group revenues, Morgan Stanley said, rose 31% to $13.41 billion, again topping analysts' estimates of a $10.31 billion tally.

Trading revenues were the key driver for the beat, following similar gains for rivals such as JPMorgan  (JPM) - Get Report, Goldman Sachs  (GS) - Get Report and Citigroup  (C) - Get Report, with fixed income revenues rising 117% to $3 billion and equities revenues rising 23% to $2.6 billion. Investment banking revenues rose 40% to $2.1 billion, Morgan Stanley said.

Wealth management revenues, a significant portion of the group's overall business, rose 6% to $4.68 billion. 

“Our decade long business transformation was intended to provide stability during times of serious stress. The second quarter tested the model and we performed exceedingly well, delivering record results," said CEO James Gorman. 

"This builds on the momentum of a very strong first quarter, while more than 90% of our employees continue to work from home, demonstrating the ongoing operational resilience of our platform," he added. "We remain focused on supporting our employees, communities, and clients, while managing our risk and continuing to invest in our businesses.”  

Morgan Stanley shares were marked 1.3% higher in early trading Thursday following the earnings release to change hands $52.04 each, a move that would nudge the stock into positive territory for the year.