For Q210, investment bank Morgan Stanley (MS) reported income of $1.4bn, or $0.80 per diluted share. Net revenues were $8bn for the second quarter. Assets under management of $251bn increased from $242bn a year ago. In Q209, Morgan Stanley lost $138m. Last quarter, Morgan Stanley reported income of $1.8bn, or $1.03 per diluted share, compared with a loss of $17m, or $0.41 per diluted share, for the same period a year ago. Net revenues were $9.1bn for Q110, compared with $2.9bn in Q109. Morgan Stanley is the tenth largest issuer of mortgage-backed securities in the US, with $2.1bn in volume last year. The bank also owns Saxon, a servicer of residential mortgages, though its market share is increasingly dwindling. FBR Capital Markets researchers had upgraded Morgan Stanley to "outperform" during the quarter as well. "Given the uncertainty surrounding financial reform, we take some comfort in the more diversified businesses of Morgan Stanley over other competitors that have a higher concentration in areas impacted by financial reform," said a research note penned by analysts Amy DeBone and Steve Stelmach. The FBR estimates for Morgan Stanley was for $0.46 (formerly $0.78); consensus $0.59. The updated 2Q10 estimate represents an 11% decline in investment banking revenue, offset by a 5% increase in total commissions, compared to our previous estimates, which represented 5% and 1% increases, respectively. Compensation expenses of $3.9bn included a charge of $361m related to the U.K. government’s payroll tax on 2009 discretionary bonuses. Morgan Stanley provides a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,300 offices in 42 countries. Write to Jacob Gaffney. The author holds no relevant investments.