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Market volatility dampens Morgan Stanley's Q4'18 results

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Market volatility dampens Morgan Stanley's Q4'18 results

Morgan Stanley reported lower adjusted earnings for the fourth quarter of 2018 as market volatility impacted its fixed income sales and trading results.

Adjusted EPS for the quarter came in at 73 cents, compared to 84 cents a year ago. These results excluded an intermittent net discrete tax benefit of $111 million, or 7 cents per share. In the year-ago period, the company incurred an intermittent net discrete tax provision of $1.0 billion, or a loss of 58 cents per share.

The S&P Global Market Intelligence consensus normalized EPS estimate for the quarter was 89 cents.

On a GAAP basis, the company reported 2018 fourth-quarter earnings applicable to common shares of $1.36 billion, or 80 cents per share, compared to $473 million, or 26 cents per share, a year ago.

Net revenues for the quarter were $8.55 billion, down 10% from $9.50 billion in the year-ago period.

By segment, revenues in the company's institutional securities segment declined 15% during the period to $3.84 billion amid volatile markets. Revenues in the wealth management segment fell 6% to $4.14 billion "due to the difficult environment, seasonality and certain compensation-related items," the company said. The investment management segment grew revenues during the period to $684 million from $653 million.

During the quarter, the company repurchased about $1.2 billion of its common shares, or approximately 27 million shares.

For the full year 2018, earnings applicable to common shares were $8.22 billion, or $4.73 per share, up from $5.59 billion, or $3.07 per share, in the previous year. Net revenues were $40.11 billion, up 6% from $37.95 billion in 2017.

The company's full-year 2018 results included an intermittent net discrete tax benefit of $203 million, or 12 cents per share, while the previous year's results included an intermittent net discrete tax provision of $968 million, or a loss of 53 cents per share. Excluding those items, adjusted EPS was $4.61, compared to $3.60 a year ago.