Morgan Stanley (MS) earnings 1Q 2023

Morgan Stanley on Wednesday beat expectations for first-quarter results and revenues on better-than-expected trading results.

Here’s how the company did it:

• Earnings of $1.70 per share, vs. $1.62 Refinitive estimate
• Revenue of $14.52 billion, versus $13.92 billion estimate.

The bank said earnings fell 19% to $2.98 billion, or $1.70 a share, from a year earlier. The company’s revenue fell 2% to $14.52 billion.

Wealth management revenue rose 11% from the same period last year to $6.56 billion, matching the StreetAccount estimate. The increase was driven by an increase in net interest income due to higher interest rates and loan growth, which offset lower asset management income as markets fell.

Under CEO James Gorman, Morgan Stanley has become a wealth management giant thanks to a series of acquisitions. The bank gets most of its income from wealth and investment management, more stable businesses that helped offset volatile trading and banking results.

“The investments we’ve made in our wealth management business continue to bear fruit as we added a robust $110 billion in net new assets this quarter,” Gorman said in the earnings release. “Equity and fixed income were strong, although Investment Banking activity continued to be limited.”

Morgan Stanley shares have risen 5.7% this year through Wednesday, outpacing the 16% decline in the KBW Bank Index.

JPMorgan Chase, Citigroup, Wells Fargo and Bank of America all topped expectations as the firms reaped more interest income amid rising interest rates. Goldman Sachs missed out on costs associated with offloading consumer loans amid its turnaround from retail banking.

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