Morgan Stanley's Earnings: Q4 Beats Revenue Estimates Despite Profit Decline
Portfolio Pulse from Anusuya Lahiri
Morgan Stanley (NYSE:MS) reported Q4 earnings with a net profit of $1.5 billion, down from $2.2 billion Y/Y, but surpassed revenue estimates with $12.9 billion against a consensus of $12.75 billion. The Wealth Management division's revenue was flat Y/Y, while Investment Banking revenue grew by 5.3%. Fixed Income revenues slightly increased. The decline in net income was attributed to higher costs in Wealth Management and a $249 million regulatory settlement. The company declared an 85 cent quarterly dividend, and shares were down 3% at last check. James Gorman ended his tenure as CEO, with Ted Pick succeeding him. In comparison, the SPDR Select Sector Fund – Financial (NYSE:XLF) gained 4.8% last year, while MS shares lost 7.6%.
January 16, 2024 | 2:58 pm
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NEGATIVE IMPACT
Morgan Stanley reported higher Q4 revenues but lower profits due to increased costs and a regulatory settlement. The company declared an 85 cent quarterly dividend.
The decline in net income and the recent 3% drop in share price suggest a negative short-term impact on MS stock. However, the declaration of a dividend may provide some support to the stock price.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
Morgan Stanley's performance contrasts with the broader financial sector, as represented by XLF, which gained 4.8% last year compared to MS's 7.6% loss.
While Morgan Stanley's performance may influence the financial sector to some extent, XLF is a diversified ETF, and the impact of one company's earnings is diluted among many holdings.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50