Morgan Stanley Posts $578 Million Loss, Slashes DividendShares of financial services giant Morgan Stanley ( MS) receded Wednesday morning, on the heels of the company's larger-than-expected first-quarter loss. The New York-based bank said late Tuesday that it lost $578 million, or 57 cents per share, during the fiscal first quarter. This compares to a profit of $1.3 billion, or $1.26 per share in the year-ago quarter. These latest results badly missed expectations. On average, Wall Street analysts expected the company to report a loss of 8 cents per share. Because of a shift to a traditional calendar quarter, Morgan also reported December 2008 results separately, saying it lost a staggering $1.6 billion in that month alone. Morgan said that the first-quarter results included a $1 billion loss from real estate investments, and a $1.5 billion loss because the value of its debt ballooned as the company's creditworthiness increased. CEO John Mack said that "Morgan Stanley would have been profitable this quarter if not for the dramatic improvement in our credit spreads -- which is a significant positive development, but had a near-term negative impact on our revenues." In perhaps the biggest news to come out of the earnings report, Morgan said that it is slashing its quarterly dividend by over 81 cents, from 27 cents per share to 5 cents. Morgan Stanley shares fell more than 8% after hours Tuesday, but pared some of those losses by Wednesday morning, when shares were trading down $1.66, or -6.7%. We removed shares of MS from our "Recommended" list back on Aug.12, when the stock traded at $45.39. The company has a .81% dividend yield, based on last night's closing stock price of $24.65.
Wells Fargo Shares Rise After Earnings BeatFamous banker Wells Fargo & Company ( WFC) beat both analyst estimates and its own preannounced guidance in its earnings report Wednesday morning, sending its shares significantly higher after a small premarket drop. The San Francisco-based bank said it earned $3.05 billion, or 56 cents per share, in the fiscal first quarter, compared to $2 billion, or 60 cents per share, in the year-ago period. Revenue rose to a record $21.02 billion, up from $10.56 billion in the first quarter last year. This quarter's results were greatly aided by Wells' acquisition of Wachovia, which contributed $8.72 billion of total revenue. On average, Wall Street analysts expected earnings per share of 41 cents on revenue of $19.37 billion. Wells had preannounced earnings on April 9 for net income of 55 cents per share on revenue of $20 billion. Wells Fargo shares rallied $1.34, or +7%, in morning trading Wednesday. We removed shares of WFC from our "recommended" list back on Oct. 9, when shares traded at $31.90. The company has a dividend yield of 1.06%, based on last night's closing stock price of $18.81. The stock has technical support in the $13-$15 price area. If the shares can firm up, we see overhead resistance around the $21-$23 price levels. We would remain on the sidelines for now.
- Landline phone service fell 12.2% to $8.7 billion Wireless subscriptions up 24% YOY, adding 1.2 million net wireless subs, including 875,000 postpaid net adds Wireless data revenue up 38.6% Added 471,000 broadband subscribers, including 359,000 wired broadband subs, up over 50% from Q4 2008