Morgan Stanley's stock surges after profit beats expectations, revenue surprisingly increases

Shares of Morgan Stanley surged 4.2% in premarket trading Thursday, after the bank and broker reported third-quarter profit and revenue that rose above expectations, as strength in its institutional securities and investment management businesses offset some weakness in wealth management. Net income rose to $2.06 billion, or $1.27 a share, from $2.02 billion, or $1.17 a share, in the year-ago period. The FactSet consensus for earnings per share was $1.11. Revenue grew 2% to $10.03 billion from $9.87 billion, while the FactSet consensus was for a decline to $9.59 billion, as net interest income jumped 30% to $1.22 billion to top expectations of $963.3 million. Institutional securities revenue increased 1.9% to $5.02 billion from $4.93 billion, while the FactSet consensus was for a decline to $4.51 billion, as a 4% rise in investment banking revenue to $1.64 billion beat expectations of $1.43 billion. Equity sales and trading revenue fell to to $1.99 billion from $2.02 billion, missing expectations of $2.10 billion, but fixed income sales and trading revenue rose to $1.43 billion from $1.18 billion to beat expectations of $1.11 billion. The stock has slumped 22% year to date through Wednesday, while the SPDR Financial Select Sector ETF has rallied 18% and the S&P 500 has advanced 19%.

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