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Morgan Stanley sees higher i-banking, sales and trading revenues for Q3

Morgan Stanley reported third-quarter earnings applicable to common shareholders of $2.06 billion, or $1.27 per share, up from $2.02 billion, or $1.17 per share, in the year-ago period.

The S&P Global Market Intelligence consensus GAAP EPS estimate for the quarter was $1.11.

The investment banking giant reported net revenues of $10.03 billion, a 2% increase from $9.87 billion in the same period a year ago. Institutional securities revenues posted a year-over-year increase to $5.02 billion from $4.93 billion, with investment banking revenues increasing 5% to $1.54 billion from $1.46 billion, and sales and trading revenues increasing 10% to $3.46 billion from $3.13 billion.

Morgan Stanley attributed the higher i-banking revenues to higher M&A fees on increased volume of deals. While equity sales and trading revenues were relatively flat on a year-over-year basis, fixed-income sales increased 21% and the company credited it to "strong client activity in the credit and rates businesses, partially offset by a decline in foreign exchange."

However, investments and other revenues sharply declined to $33 million from $340 million. Morgan Stanley primarily attributed the decreases to "mark-to-market losses on remaining holdings subsequent to certain investments' initial public offerings."

Wealth management revenues saw a slight decline to $4.36 billion from $4.40 billion, as increases in asset management revenues were coupled with decreases in transaction revenues and net interest income. Investment management revenues for the quarter increased 17% to $764 million from $653 million, with asset management revenues in the division posting an increase to $664 million from $604 million.

Morgan Stanley shares were up 4% in pre-market trading hours.