Summary
Morgan Stanley's Q3 2010 filing indicates a mixed financial performance. While total assets grew to $841 billion, driven by increased financial instruments and securities financing activities, net revenues declined compared to the prior year's third quarter, primarily due to weaker performance in the Institutional Securities segment. This decline was driven by lower equity and fixed income sales and trading revenues, as well as reduced investment banking revenues, particularly in equity underwriting. However, the Global Wealth Management Group saw a slight increase in net revenues, supported by higher fee-based revenues and the ongoing integration of Morgan Stanley Smith Barney (MSSB). The company also reported a net income applicable to Morgan Stanley of $131 million for the quarter, a decrease from $757 million in the same period last year, impacted by lower revenues and a significant tax benefit related to repatriated foreign earnings. Diluted EPS turned negative at $(0.07), down from $0.38 in the prior year's quarter, reflecting the challenging revenue environment. Despite the quarterly revenue dip, the year-to-date performance showed substantial improvement, with net income applicable to Morgan Stanley reaching $3.87 billion for the first nine months of 2010, compared to $729 million in the prior year. This year-to-date growth was boosted by the inclusion of MSSB's results, improved trading performance in certain areas, and significant gains from discontinued operations, including the sale of Retail Asset Management and a legal settlement with Discover Financial Services. The company's capital position remained strong, with Tier 1 capital ratios well above regulatory requirements, although the company is also navigating evolving regulatory landscapes like Basel III.
Financial Highlights
43 data points| Revenue | $6.73B |
| Operating Income | $3.60B |
| Interest Expense | $1.75B |
| Net Income | $131.00M |
| EPS (Basic) | $-0.07 |
| EPS (Diluted) | $-0.07 |
| Shares Outstanding (Basic) | 1.38B |
| Shares Outstanding (Diluted) | 1.44B |
Key Highlights
- 1Total assets increased to $841.37 billion as of September 30, 2010, up from $771.46 billion at December 31, 2009, primarily due to growth in financial instruments and securities financing activities.
- 2Net revenues for the third quarter of 2010 decreased to $6.78 billion from $8.47 billion in the third quarter of 2009, largely driven by a decline in the Institutional Securities segment, particularly in sales and trading and investment banking.
- 3Net income applicable to Morgan Stanley for the third quarter was $131 million, a significant decrease from $757 million in the prior year's quarter, impacted by lower revenues and a $229 million loss related to the planned disposition of Revel Entertainment Group.
- 4Diluted Earnings Per Share (EPS) was $(0.07) for the third quarter of 2010, compared to $0.38 in the prior year's quarter.
- 5Year-to-date net income applicable to Morgan Stanley through September 30, 2010, showed a strong increase to $3.87 billion, up from $729 million in the same period of 2009, benefiting from the inclusion of MSSB results and gains from discontinued operations.
- 6The company's capital ratios remained robust, with a Tier 1 capital ratio of 16.5% and a Tier 1 leverage ratio of 6.7% as of September 30, 2010, comfortably exceeding regulatory requirements.
- 7The Global Wealth Management Group reported increased fee-based revenues and continued client asset growth, with total client assets reaching $1.60 trillion.