Morgan Stanley earnings beat consensus by nearly $200 million

Net revenues increase before big move into mortgage market

Morgan Stanley, a global financial services firm, reported third-quarter earnings that surpassed expectations.

The company reported net revenues of $9.2 billion, which, while down 3% from $9.5 billion in the second quarter, is up 3% from $8.9 billion last year. This beat consensus estimates by nearly $200 million, according to an article by Seeking Alpha.

“Our third quarter results reflected the stability our wealth management, investment banking and investment management businesses bring when our sales and trading business faces a subdued environment,” said James Gorman, Morgan Stanley chairman and CEO. “Our balanced business model and the consistent performance of our franchise enabled us to deliver solid returns for our shareholders.”

The company reported a net income of $1.8 billion, up 1% from $1.75 billion in the second quarter and up 12% from $1.6 billion last year.

This translated into diluted earnings per share of $0.93 during the third quarter, an increase of 7% from $0.87 in the second quarter and 15% from last year’s $0.81 per share. This increase also beat expectations of just $0.81 per share in the third quarter, according to Zacks Investment Research, which is based on six analysts’ forecasts.

Though it will not be reflected in the third quarter’s earnings, Morgan Stanley’s fourth quarter earnings could reflect its new push into mortgage originations. Last year, while Morgan Stanley renewed their current contract until Oct. 31, 2017, the company informed PHH Corp. that it would be assessing the agreement upon the completion of that contract. Now, Morgan Stanley is set to bring the business in-house.

For more on Morgan Stanley's mortgage push, click here.

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