Instant view: Morgan Stanley posts quarterly loss

NEW YORK (BestGrowthStock) – Morgan Stanley on Wednesday reported a third quarter loss as slumping trading volumes weighed on its trading and retail brokerage businesses.

The bank reported a third-quarter net loss applicable to Morgan Stanley shareholders of $91 million, compared to a profit of $498 million a year ago. On a per share basis, Morgan Stanley reported income from continuing operations of 5 cents, down from 50 cents a year ago.

The operating income fell well short of analysts’ average expected profit of 15 cents a share, according to Thomson Reuters I/B/E/S.

Morgan Stanley shares were down 1.4 percent in premarket trading.

The following is reaction from industry analysts and investors:

BERNARD MCALINDEN, INVESTMENT STRATEGIST AT NCB

STOCKBROKERS, DUBLIN

“It sounds like poor results. Trading volumes have been poor all over the world for the last few quarters. The banking sector’s performance relative to the equity market is telling us that people have been remaining quite cautious about banks.”

CORMAC LEECH,ANALYST AT CANACCORD GENUITY

“They’re disappointing, after good results from Citi and JP Morgan. The biggest disappointment was in fixed income and equities.”

DAVID MORISSON, MARKET STRATEGIST, GFT GLOBAL

“There was always a danger that there would be some severe misses. Yield curves have flattened since the market lows in 2009 hitting fixed income revenues and while there’s been a lot of noise on M&A activity, there’s been very little action.”

MANOJ LADWA, SENIOR TRADER, ETX CAPITAL, LONDON

“Third-quarter EPS ex-items was a little bit better than expected. Obviously they’re the biggest brokerage, if not one of them, and the revenue from that side of the business has done fairly well.”

WILL HEDDEN, SALES TRADER AT IG INDEX

“Morgan Stanley missed expectations fairly convincingly. The bank has done pretty poorly on earnings per share, but it does not look like the market is paying too much attention to it at the moment.”

(Reporting by Brian Gorman, Simon Falush, Tricia Wright and Joanne Frearson in London)

Instant view: Morgan Stanley posts quarterly loss