Morgan Stanley shares rose 2.3% in premarket trade Wednesday, after the bank beat profit estimates for the fourth quarter amid strong performances at its investment banking and wealth management divisions. Morgan Stanley posted net income of $3.7 billion, or $2.01 a share, for the quarter, up from $3.4 billion, or $1.81 a share, in the year-earlier period. Revenue rose to $14.524 billion from $13.597 billion a year ago. The FactSet consensus was for EPS of $1.94 and revenue of $14.558 billion. Investment banking revenues rose 6%, driven by higher M&A fees from a flurry of deals. Equity underwriting revenue fell from a year ago amid a decline in follow-on offerings and block trades, but were partially offset by higher revenue from private placements. Fixed income underwriting revenue rose, driven by higher securitized products and high-yield issuances. In trading, equity revenues rose 13% driven by higher prime brokerage revenues and a mark-to-market gain of $225 million on a strategic investment. Fixed income revenues fell 31% from a year ago in what the bank called a “challenging trading environment.” In the wealth management division, revenue rose 10% from a year ago to $6.3 billion from $5.7 billion. Net interest income rose thanks to growth in lending and higher brokerage sweep deposits. Investment management revenue rose to $128 billion from $1.1 billion, driven by the acquisition of Eaton Vance, higher performance fees and higher assets under management. Shares have gained 25% in the last 12 months, while the S&P 500 has gained 20.5%.
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