Summary
Morgan Stanley reported a net income of $906 million for the third quarter of 2013, a significant turnaround from the net loss of $1,023 million in the same period of 2012. This improved performance was driven by a substantial increase in net revenues to $7.9 billion, up from $5.3 billion year-over-year, bolstered by strong trading results and a complete acquisition of its Wealth Management joint venture. The Institutional Securities segment saw a notable recovery, moving from a substantial pre-tax loss in the prior year to a pre-tax profit, primarily due to improved trading and investment banking performance. Wealth Management also demonstrated robust growth in net revenues and income, benefiting from higher asset management fees and improved equity and fixed income trading. The company's effective tax rate improved significantly compared to the prior year, partly due to discrete tax benefits. Total assets grew to $832.2 billion from $781.0 billion at the end of 2012, with increases noted in securities borrowed and cash and cash equivalents. Long-term borrowings saw a decrease, reflecting ongoing management of the company's debt profile. Morgan Stanley maintained strong capital ratios, well above regulatory requirements, and completed the acquisition of the remaining 35% stake in its Wealth Management joint venture, consolidating full ownership and expecting future benefits from this integration. Despite ongoing litigation and regulatory scrutiny, particularly related to mortgage and credit crisis matters, the company's overall financial performance for the quarter showed a marked improvement.
Financial Highlights
39 data points| Revenue | $7.96B |
| Operating Income | $2.88B |
| Interest Expense | $1.15B |
| Net Income | $906.00M |
| EPS (Basic) | $0.46 |
| EPS (Diluted) | $0.45 |
| Shares Outstanding (Basic) | 1.91B |
| Shares Outstanding (Diluted) | 1.96B |
Key Highlights
- 1Net income applicable to Morgan Stanley increased to $906 million from a net loss of $1,023 million in the prior year period.
- 2Total net revenues increased to $7.9 billion from $5.3 billion year-over-year, driven by strong trading and investment banking results.
- 3The Institutional Securities segment turned profitable with pre-tax income of $371 million, a significant improvement from a pre-tax loss of $1,928 million in the prior year.
- 4Wealth Management reported a pre-tax income of $668 million, more than doubling the $247 million from the prior year quarter, benefiting from higher asset management fees and improved trading performance.
- 5Morgan Stanley completed the acquisition of the remaining 35% stake in its Wealth Management joint venture for $4.725 billion, now owning 100% of the business.
- 6Total assets grew to $832.2 billion, while capital ratios remained strong and well above regulatory requirements.
- 7Diluted Earnings Per Share (EPS) improved to $0.45 from $(0.55) in the prior year quarter.