Morgan Stanley (MS) reported a $78 million operational loss in the first quarter of 2012, or a loss of $0.05 per share compared with income of $984 million, or $0.51 per share, for the same period a year ago.

The Wall Street brokerage firm used an accounting technique called debt valuation adjustment to tweak its latest earning report. The DVA increases in the value of the company’s debt, by measuring securities based on fluctuating fair market values.

Excluding DVA, net revenues for the current quarter were $8.9 billion compared with $7.8 billion a year ago and income from continuing operations applicable to Morgan Stanley was $1.4 billion, or $0.71 per share, compared with $1.1 billion, or $0.59 a year ago.

Net revenues totaled $6.9 billion for the first quarter of 2012 compared with $7.6 billion a year ago.

For the current quarter, the net loss applicable to Morgan Stanley, including discontinued operations, was $0.06 per share, compared with net income of $0.50 per share in the first quarter of 2011.

CEO James Gorman said he was pleased with the results. “This quarter is further evidence that Morgan Stanley has rebounded from the financial crisis of 2008 and is in a significantly stronger position,” he said.

“On the near horizon, we are intensely focused on completing the transition of Morgan Stanley Smith Barney to the new, state-of-the-art technology platform this summer, as well as maintaining a conservative capital and liquidity profile as we navigate global markets,” he added.

— Jacob Gaffney