Morgan Stanley Releases Its Q1 Earnings Report, Profit Drops, MS Stock Is Nearly 0.5% Down

UTC by Teuta Franjkovic · 3 min read
Morgan Stanley Releases Its Q1 Earnings Report, Profit Drops, MS Stock Is Nearly 0.5% Down
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As Morgan Stanley published its Q1 2020 earnings report, the MS stock price has started to fall. Despite short periods in the green during the session. now it is falling by around 0.50%.

Morgan Stanley (NYSE: MS) reported its net revenue that totaled $9.49 bln in Q1 of fiscal 2020. It has decreased by 7.8% in comparison to the same period of the previous year.

Net income applicable to the firm amounted to $1.7 bln in the three months ending with March 31, 2020, plunging by 30% from the same trimester last year. The diluted earnings per share (EPS) of Morgan Stanley stood at $1.01, down 27% compared to the Q1 of 2019.

Morgan Stanley (MS) Stock in Red after Q1 Earnings Report Released

“Over the past two months, we have witnessed more market volatility, uncertainty and anxiety as a result of the devastating COVID-19 than at any time since the financial crisis. While it’s too early to predict how this will unfold, Morgan Stanley navigated the quarter well given the conditions, and our results bear testament to the strength of our balanced business model,” Chairman and CEO James P. Gorman said in a statement.

Morgan Stanley (MS) stock was 0.78% lower in pre-market trade after the publication of the report. Now MS stock is trading at $38.40, which means it is in the red again, falling by around 0.50%.

Morgan Stanley said the coronavirus outbreak affected each of its businesses. From the company they stated:

“Though we are unable to estimate the extent of the impact, an extended period of depressed economic activity necessitated to combating the disease, and the severity and duration of the related global economic crisis, will adversely impact our future operating results, and the attainment of our financial targets.”

The bank added that the new environment might feature “many of the same negative impacts and without the potential benefit of higher client trading activity experienced in the first quarter.”

Revenue Rose 30%

Comparing results with rival banks, trading results were pretty much strong: Revenue rose 30% from a year earlier, and fixed income desks generated $2.2 billion in revenue, half a billion dollars more than expected. Equities desks also outperformed, making $2.42 billion in revenue, almost $200 million more than expected.

Investment banking revenue fell however 1% to $1.14 billion, underneath the $1.26 billion predicted, as higher debt issuance couldn’t entirely make up for lower activity in IPOs and lower demand for M&A advice.

Under Chief Executive Officer James Gorman, Morgan Stanley has emphasized its wealth management division as a steadier business than its trading operations. Gorman recently recovered from the coronavirus.

He actually had not earlier said that he was infected, informed employees in a video that he tested positive for the disease in March but is healthy again.

“Over the past two months, we have witnessed more market volatility, uncertainty and anxiety as a result of the devastating COVID-19 than at any time since the financial crisis. While it’s too early to predict how this will unfold, Morgan Stanley navigated the quarter well given the conditions, and our results bear testament to the strength of our balanced business model,” said he.

Business News, Market News, News, Stocks, Wall Street
Teuta Franjkovic
Author: Teuta Franjkovic

Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.

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