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Morgan Stanley shares surge after Q2 earnings beat

Shares of Morgan Stanley (MS) rose in the pre-market hours Wednesday after the company smashed past analysts expectations during Q2 2018, aided by strong performance in investment banking and trading. The bank reported earnings of $1.30 per share, topping analysts expectation of $1.08 a share. Revenue during the quarter rose to $10.6 billion, topping the consensus estimate of $10.5 billion.

The New York-based company has successfully delivered earnings beat in a row over the past 10 quarters. Even in the last quarter, the company recorded a profit riding on a lower tax bill and a boost in revenue.

Sales and Trading net revenues rose 18% to $3.8 billion. Equity sales and trading net revenues came in at  $2.5 billion, higher than $2.2 billion a year ago. This reflects the strong performance across all products, particularly the financing business.

Morgan Stanley second quarter 2018 earnings

 

The company shares rose 3.09% to $50.70 during the pre-market trading.

Related: Citigroup earnings beat view; stock dips on revenue miss

According to Reuters, When James Gorman took over Morgan Stanley as a CEO, the bank’s wealth management division used to generate single-digit pretax margin. But in the course of time, he lifted the pretax margin target to double-digits. In the current quarter, the division continued to deliver solid results with pretax margin of 26.8%.

Related: Morgan Stanely Q2 2018 earnings call transcript

“The second quarter performance reflected active markets and healthy client engagement.Our strong global franchise positions us well to continue to grow organically across each of our businesses and to deliver operating leverage,” said Gorman.

Related: Goldman Sachs tops estimates; profit jumps 44%

The company’s board declared a quarterly dividend to $0.30 per share (an increase from $0.25 per share), payable on August 15, 2018 to common shareholders of record on July 31, 2018.

Related Infographics: Q1 earnings

Morgan Stanley Q1 2018 Earnings Infographic

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