New York: Morgan Stanley reported a surprising third-quarter loss on Wednesday as weak volumes battered its trading businesses.
On a per-share basis, income from continuing operations was 5 cents, well below analysts’ average forecast of 15 cents, according to Thomson Reuters I/B/E/S.
“They’re disappointing, after good results from Citi and JPMorgan, said Cormac Leech, analyst at Canaccord Genuity. “The biggest disappointment was in fixed income and equities.”
Fixed income sales and trading revenues were $846 million, down 57% from a year earlier.
The bank reported a net loss applicable to shareholders of $91 million, compared with a profit of $498 million a year earlier.
Morgan Stanley said its results reflected a loss of $229 million on a writedown related to the disposition of Revel Entertainment Group, a hotel and casino project in Atlantic City, New Jersey.
Its global wealth management business did not offer much relief, reporting net revenues of $3.1 billion, up just 1% from a year earlier. Morgan Stanley said lower levels of client activity weighed on its retail brokerage results.
The firm also announced it was restructuring its ownership of FrontPoint Partners LLC, its hedge fund unit. Morgan Stanley will retain a minority ownership in FrontPoint.
Morgan Stanley shares were down 37 cents, or 1.5%, to $25.02 in premarket trade.