Morgan Stanley, with solid performances in its major divisions - particularly in fixed income - on Thursday reported adjusted third-quarter earnings of $561 million.
This translates into an adjusted per share profit of 28 cents, 4 cents ahead of analysts' expectations, according to a survey by Thomson Reuters. Yet the firm's non-adjusted earnings, which include a one-time charge related to it credit spreads, turned this profit into a large loss of $1.01 billion, or 55 cents a share.
Morgan Stanley produced adjusted net revenue of $7.6 billion, or $5.3 billion when the one-time charge is backed out. Analysts typically look at the earnings without one-time charges.
“The rebound in fixed Income and commodities sales and trading indicates that clients have re-engaged after the uncertainty of the rating review in the previous quarter,†James P. Gorman, the firm's chief executive, said in a statement. “We are beginning to unlock the full potential of the global wealth management franchise, having increased our ownership of, and agreed on a purchase price for the rest of, Morgan Stanley Wealth Management.â€
It's been a rocky few years for Morgan Stanley. Profits have been pinched across Wall Street since the financial crisis as regulators have forced all firms to lower the amount of borrowed money they use to fund their operations and post more capital against risky business, reducing profitability.
At the same time Morgan Stanley, because of past missteps and its relative size, has had a rough go of things with the rating agencies, increasing its cost of borrowing and forcing it to scale back in certain areas.
