Morgan Stanley Q2 Results Top Estimates; Doubles Dividend

Financial services firm Morgan Stanley (MS) reported Thursday a profit for the second quarter that increased 12 percent from last year, reflecting an 8 percent revenue growth amidst contributions across each of its business segments and geographies. Both adjusted earnings per share and quarterly net revenues topped analysts’ expectations.

“The Firm delivered another very strong quarter, with contributions from all of our businesses,” said James Gorman, Chairman and CEO.

For the second quarter, the company reported net income applicable to the company’s shareholders of $3.41 billion or $1.85 per share, compared to $3.05 billion or $1.96 per share in the year-ago quarter.

Excluding items, adjusted earnings for the quarter were $1.89 per share. On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $1.65 per share for the quarter. Analysts’ estimates typically exclude special items.

Net revenues for the quarter increased 8 percent to $14.76 billion from $13.66 billion in the same quarter last year. The Street was looking for revenues of $13.96 billion for the quarter.

Institutional Securities net revenues declined 45 percent to $7.09 billion from $8.20 billion, reflecting strong results as clients remained active across Investment Banking and Equity.

Wealth Management net revenues increased 30 percent to $6.10 billion from last year’s $4.70 billion, reflecting higher asset management fees, growth in bank lending, as well as net new assets and fee-based flows.

Investment Management net revenues were $1.70 million, up 92 percent from $886 million a year ago, driven by strong asset management fees and Assets Under management (AUM).

Provision for credit losses decreased to $73 million from $239 million a year ago on loans held for investment as a result of an improved macroeconomic environment.

The firm announced a repurchase authorization of up to $12 billion of outstanding common stock through June 30, 2022.

The Board of Directors also declared a $0.70 quarterly dividend per share, payable on August 13, 2021 to common shareholders of record on July 30, 2021, a 100 percent increase from the current $0.35 per share dividend.

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