Morgan Stanley (NYSE:MS) swung back into the red in the second quarter, but the Wall Street investment banks results easily exceeded expectations as its revenue surpassed arch-rival Goldman Sachss (NYSE:GS) for the first time since late 2008.
Morgans better-than-expected second-quarter results helped send its stock leaping ahead of the opening bell.
New York-based Morgans loss was mostly due to a $1.7 billion, or $1.02-a-share charge, related to the restructuring of Mitsubishi UFJ Financials investment in the bank.
Morgan said it lost 38 cents a share last quarter, compared with a profit of $1.09 a share a year earlier. Analysts had been calling for a far deeper loss of 62 cents.
Net revenue jumped last quarter 17% to $9.28 billion, climbing well above the Streets view of $8.04 billion. It also topped Goldmans $7.3 billion revenue for the first time since late 2008, according to The Wall Street Journal.
Shareholders cheered Morgans results, bidding its stock 6.35% higher to $23.10 ahead of Thursdays open. That rally should eat into Morgans 2011 tumble of more than 20%.
While global markets remained challenging this quarter, the Firm delivered higher year-over-year revenues across our three major business segments, CEO James Gorman said in a statement. We are well positioned to help our clients navigate the constantly changing markets and create additional value for our shareholders.
Morgans results were driven by a rise in equity sales and trading net revenue to $1.9 billion, up from $1.4 billion a year ago and good for its highest since 2008. Fixed income and commodities net revenue fell just slightly to $2.1 billion from $2.3 billion despite the tough market.
Morgan posted investment-banking revenue of $1.5 billion its highest second-quarter performance since 2007. It ranked first in global completed M&A and second in global announced M&A.