Morgan Stanley 4Q earnings smash Wall Street forecasts as revenue jumps across the board

Yuri Gripas/Reuters

• Morgan Stanley posted fourth-quarter earnings on Thursday that smashed Wall Street's revenue and profit forecasts.
• Net revenue surged 27% to $10.9 billion, sending net income up 46% to about $2.2 billion.
• The bank delivered record revenue and net income last year.
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Morgan Stanley posted fourth-quarter earnings on Thursday that smashed Wall Street's revenue and profit forecasts, according to a Bloomberg survey of analysts.

The bank posted higher revenues across its three main divisions, reflecting strong growth in sales and trading, asset management, and investment revenue.

Here are the key numbers:

• Revenue: $10.9 billion, versus $9.7 billion expected
• Net income: $2.2 billion, versus $1.6 billion expected
• Earnings per share: $1.30 versus $0.99 expected

"We delivered strong quarterly earnings across all of our businesses," CEO James Gorman said in the earnings release.

"Firmwide revenues were over $10 billion for the fourth consecutive quarter, resulting in record full year revenues and net income. This consistent performance met all of our stated performance targets."

Morgan Stanley's institutional securities division posted a 32% rise in revenue in the fourth quarter. Investment banking revenue climbed 11% as higher equity and fixed-income underwriting sales offset a decline in advisory revenues. Sales and trading revenue soared 28% as fixed-income sales more than doubled to about $1.3 billion.

The bank's wealth management business delivered record fourth-quarter revenues and pre-tax income. Revenue rose 11% as asset-management and transactional sales increased, offsetting a 6% drop in net interest income.

Meanwhile, the investment management business nearly doubled its sales to $1.4 billion as asset management and investment revenues both rose.

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