Morgan Stanley Shares Fall After Earnings Report

Business Insider

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Investment banking giant Morgan Stanley has announced its Q1 financial results, and the report is noisy.

Earnings after adjustments came in at $0.61 per share.

Analysts were looking for a bottom line profit of $0.56 per share.  Last year, they reported a loss of $0.06.

Adjusted revenue came in at $8.48 billion, which was ahead of the $8.35 billion expected.  This is up from $6.94 billion a year ago.

The primary adjustment that was made were the negative revenue related to changes in Morgan Stanley’s debt-related credit spreads and other credit factors (i.e. Debt Valuation Adjustment, DVA).  When the perceived risk of Morgan Stanley's debt comes down, these spreads become tighter which translates to negative revenue.

The stock initially rallied on the report. But now it's in the red.

"Looking forward, while the global environment continues to have moments of fragility, we believe the broad economic outlook for the next several years is stronger than in the recent past," said CEO James Gorman.



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