Morgan Stanley CEO Ted Pick speaks on CNBC's Squawk Box before the World Economic Forum in Davos, Switzerland, on January 23, 2025.
Gerry Miller | CNBC
Morgan Stanley reported third-quarter earnings on Wednesday that beat expectations by the largest margin in nearly five years, driven by booming results in equity trading, investment banking and wealth management.
Here's what the company reported:
- Earnings per share: $2.80 versus $2.10 expected, according to LSEG
- Revenue: $18.22 billion versus $16.7 billion, according to LSEG
The bank said profit rose 45% from a year ago to $4.61 billion, or $2.80 per share. Sales rose 18% to a record $18.22 billion.
Shares of Morgan Stanley rose nearly 5% in premarket trading. As of Tuesday's close, they were up about 24% this year.
Wall Street trading desks reported high levels of activity in the quarter, while investment banking continued to see a resurgence in mergers and initial public offerings. Stocks at or near record highs also bolstered Morgan Stanley's massive asset management division.
Combined, Wall Street-centric banks like Morgan Stanley and Peer Goldman Sachs are in an ideal environment.
Morgan Stanley said equity trading revenue rose 35% to $4.12 billion, $720 million more than analysts polled by StreetAccount had expected. The company cited increased activity across all divisions and regions, as well as record results in its prime brokerage business, which targets hedge funds.
Fixed-income trading rose 8% to $2.17 billion, broadly in line with StreetAccount's estimate.
Investment banking revenue rose 44% year-over-year to $2.11 billion in the quarter, about $430 million more than StreetAccount's estimate. The bank cited more completed mergers, more IPOs and more fixed income fundraising as drivers for the quarter.
Asset management revenue rose 13% to $8.23 billion, about $500 million more than expected, as rising asset holdings and transaction fees supported results.
On Tuesday, JPMorgan Chase, Goldman, Citigroup And Wells Fargo Each posted profits that exceeded analysts' earnings and revenue expectations.
This story is developing. Please check back for updates.