New York: Morgan Stanley on Thursday posted first-quarter profit that missed analysts’ expectations and warned that a sole bright spot for the industry, robust trading results, may prove to be fleeting.
The bank said earnings dropped 30% to $1.7 billion, or $1.01 a share, compared with the $1.14 estimate of analysts surveyed by Refinitiv. Companywide revenue of $9.49 billion was also below the $9.73 billion estimate. Morgan Stanley shares dipped less than 1%.
Morgan Stanley said the coronavirus pandemic impacted each of its major businesses, creating turmoil in financial markets that hit the value of loans, investments and some trading assets, and sapped interest income and investment banking fees. At the start of 2020, that was partly offset by robust trading results that benefited from the sudden surge in volatility, but the bank warned that the boost could peter out as the crisis wears on.
“Though we are unable to estimate the extent of the impact, an extended period of depressed economic activity necessitated to combating the disease, and the severity and duration of the related global economic crisis, will adversely impact our future operating results, and the attainment of our financial targets,” the bank warned. It added that the new environment might feature “many of the same negative impacts and without the potential benefit of higher client trading activity experienced in the first quarter.”
