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Morgan Stanley posts lower Q2 earnings YOY, ups dividend

MorganStanley reported second-quarter earnings applicable to commonshareholders of $1.43 billion, or 75 cents per share, down from $1.67 billion,or 85 cents per share, in the prior-year quarter.

The prior-year quarter included a debt valuation adjustmentof $182 million. Excluding debt valuation adjustments in the prior-yearquarter, net income applicable to Morgan Stanley was 79 cents per share.

The S&P Capital IQ consensus GAAP EPS estimate for thequarter was 59 cents.

Second-quarter net revenues declined to $8.91 billion from$9.74 billion in the year-ago period.

Institutional securities revenues fell to $4.58 billion inthe second quarter from $5.17 billion in the prior-year quarter. Advisoryrevenues climbed to $497 million from $423 million year over year on highercompleted M&A activity. Equity underwriting revenues fell to $266 millionfrom $489 million, reflecting significantly lower market volumes. Fixed incomeunderwriting revenues were $345 million, down from $528 million, mainly due tolower bond and loan fees.

Wealth management revenues also declined to $3.81 billionduring the quarter from $3.88 billion in the year-ago period. Asset managementfee revenues were $2.1 billion, a decline from $2.2 billion in the prior-yearquarter due to lower average fee rates related to fee-based accounts and lowermarket levels, the impact of which was partially offset by positive flows.

Investment management revenues dropped to $583 million from$751 million, reflecting lower investment gains and carried interest ininfrastructure and private equity investments.

Investment banking revenues also fell 24% to $1.22 billionin the second quarter from $1.61 billion in the year-ago period.

During the second quarter, the company repurchasedapproximately $625 million of its common stock or approximately 23 millionshares.

Morgan Stanley's board also declared a quarterly dividend of20 cents per share, an increase from the previous payout of 15 cents. Thedividend is payable Aug. 15 to common shareholders of record as of July 29.

The company redeemed all its issued and outstanding trustpreferred securities.