Investing

Morgan Stanley earnings: 84 cents per share, vs. 77 cents EPS expected

Key Points
  • EPS: 84 cents per share vs. 77 cents expected by Thomson Reuters
  • Revenue: $9.5 billion vs. $9.2 billion expected
  • Wealth management: $4.41 billion vs. $4.32 billion expected by StreetAccount
VIDEO2:1402:14
Jim Cramer: James Gorman reinvented Morgan Stanley's wealth management business

Morgan Stanley posted fourth-quarter earnings and revenue on Thursday that beat analyst expectations, excluding a charge related to the tax bill, as strong results in wealth management offset a big drop in fixed income trading revenue.

Here's how the banking giant fared against analyst estimates:

  • EPS: 84 cents per share vs. 77 cents expected by Thomson Reuters
  • Revenue: $9.5 billion vs. $9.2 billion expected
  • Wealth management: $4.41 billion vs. $4.32 billion expected by StreetAccount
  • Fixed income, commodities and currencies trading: $808 million vs. $1.05 billion expected
  • Equities trading: $1.9 billion vs. $1.85 billion expected

Wealth management revenue grew by 10.5 percent on a year-over-year basis, helping offset declines in the bank's trading revenue. Fixed income, commodities and currencies trading revenue decreased by 46 percent. Equities trading revenue fell 5 percent.

"Wealth management was not decent, it was great," CFO Jonathan Pruzan told CNBC. We feel "very good about momentum in the business. Flows are great."

VIDEO1:4801:48
Morgan Stanley beats on both top and bottom lines

The company's stock rose 0.9 percent Thursday. Morgan Stanley shares are up 4.1 percent this year, slightly outperforming the S&P 500, which is up 3.9 percent.

Morgan Stanley's bottom line excludes a one-time $990 million hit resulting from the recent changes to the U.S. tax code. Its earnings per share totaled 29 cents when including the charge.

President Donald Trump signed a bill last month that slashed the corporate tax rate to 21 percent from 35 percent. The changes are expected to be a long-term positive for companies, but some have taken one-time charges because of them. Some of these companies include Citigroup and Bank of America.

Morgan Stanley's results come a day after Goldman Sachs — another bank known for its trading business — reported a revenue decline of 50 percent in its fixed income, currencies and commodities trading business.

Goldman said trading is in a "challenging environment characterized by low levels of volatility and low client activity."

— CNBC's Wilfred Frost contributed to this report.