Morgan Stanley Misses Q1 Earnings Forecast

Morgan Stanley said more than 90% of its employees are working from home during the coronavirus pandemic, but fixed income trading revenues rose nearly 30% from last year.

Morgan Stanley  (MS) - Get Report posted weaker-than-expected first quarter earnings Thursday and added to the $25 billion U.S. banks are setting aside for credit losses amid the coronavirus pandemic.

Morgan Stanley said earnings for the three months ending in March were pegged at $1.01 per share, down 27.4% from the same period last year and 12 cents shy of the Street consensus forecast. Group revenues, Morgan Stanley said, slipped 7.7% to $9.5 billion, matching analysts' estimates. 

Credit loss provisions, which have dominated bank earnings this season as lenders brace for a wave of defaults amid a protracted coronavirus shutdown, increased to $388 million, the bank said, "on loans and unfunded lending commitments held for investment." 

“Over the past two months, we have witnessed more market volatility, uncertainty and anxiety as a result of the devastating COVID-19 than at any time since the financial crisis," said CEO Jim Gorman. "While it’s too early to predict how this will unfold, Morgan Stanley navigated the quarter well given the conditions, and our results bear testament to the strength of our balanced business model." 

"Our investments in technology and infrastructure enabled us to continue to serve our clients around the globe with more than 90% of our employees working from home," he added. "I am proud of the dedication and professionalism of our employees in the face of these obstacles.”  

Morgan Stanley shares were marked 1.5% lower in pre-market trading Thursday immediately following the earnings release to indicate an opening bell price of $37.82 each.