Summary
Morgan Stanley's first quarter 2012 results show a mixed financial performance, with a net loss attributable to common shareholders of $94 million ($0.06 per diluted share) on net revenues of $6.935 billion. This contrasts with a profitable prior year quarter, largely due to a significant negative impact from tightening "Debt-Related Credit Spreads on Borrowings" which negatively affected net revenues by $1.978 billion. Excluding this impact, net revenues would have increased to $8.913 billion, and diluted EPS from continuing operations would have been $0.71. The Institutional Securities segment reported a pre-tax loss of $312 million, heavily influenced by the credit spread impact, though excluding this impact, sales and trading revenues improved significantly. The Global Wealth Management Group showed resilience with largely stable net revenues and improved pre-tax income, driven by higher asset management fees and net interest income. Asset Management segment's net revenues declined, primarily due to lower gains on principal investments, but pre-tax income remained stable.
Financial Highlights
44 data points| Revenue | $6.92B |
| Operating Income | -$79.00M |
| Interest Expense | $1.60B |
| Net Income | -$94.00M |
| EPS (Basic) | $-0.06 |
| EPS (Diluted) | $-0.06 |
| Shares Outstanding (Basic) | 1.88B |
| Shares Outstanding (Diluted) | 1.88B |
Key Highlights
- 1Morgan Stanley reported a net loss of $94 million applicable to the company, or $(0.06) per diluted share, compared to a net income of $968 million or $0.50 per diluted share in the prior year quarter.
- 2Net revenues decreased to $6.935 billion from $7.574 billion in the prior year quarter, significantly impacted by a $1.978 billion negative revenue adjustment due to tightening "Debt-Related Credit Spreads on Borrowings."
- 3Excluding the impact of "Debt-Related Credit Spreads on Borrowings," net revenues increased to $8.913 billion, and diluted EPS from continuing operations was $0.71, up from $0.59 in the prior year period.
- 4The Institutional Securities segment reported a pre-tax loss of $312 million, a decline from a pre-tax income of $432 million in the prior year, mainly due to the credit spread impact and lower investment banking revenues.
- 5Global Wealth Management Group's net revenues were stable at $3.414 billion, and pre-tax income from continuing operations increased to $387 million from $344 million, driven by higher asset management fees and net interest income.
- 6Asset Management segment's net revenues decreased to $533 million from $622 million, primarily due to lower principal investment gains, though pre-tax income remained stable at $128 million.
- 7The company's Tier 1 common capital ratio increased to 13.3% and its Tier 1 leverage ratio improved to 7.0%, reflecting strong capital positions and a decrease in adjusted average assets.