Morgan Stanley Whips Estimates as Investment Banking Outstrips Trading

Morgan Stanley (MS)   posted higher earnings than analysts projected as an investment banking bonanza trumped the low volatility curbing bond-trading revenue across Wall Street.

Earnings of 87 cents a share compared with the 76-cent average of estimates from analysts surveyed by FactSet. Net income climbed 11% to $1.59 billion in the three months through June, the New York-based company said on Wednesday, July 19.

“Our strong investment banking results attest to the diversity of our global business,” CEO James Gorman said in a statement. Total investment banking revenue climbed 28% as underwriting of stock and bond offerings surged, the New York-based firm said.

Fixed-income trading revenue — which had seen dramatic growth last year amid Britain’s decision to leave the European Union and the U.S. presidential campaign, dropped 4% to $1.24 billion, Morgan Stanley said. Comparable businesses at JPMorgan Chase & Co. (JPM) , Bank of America Corp. (BAC) and Goldman Sachs Group Inc. (GS) all reported double-digit declines — Goldman’s more than twice as large as the others.

The results demonstrate “the resilience of our franchise in a subdued trading environment,” Gorman said.

Morgan Stanley climbed less than 1% to $45.50 before the start of regular trading in New York on Wednesday. The shares previously gained 32% in the wake of Donald Trump’s surprise victory in the U.S. presidential race, outperforming both the KBW Bank Index and the broader S&P 500.