Morgan Stanley beats estimates on higher trading revenue

Morgan Stanley’s profit was driven by gains in its fixed income and equities trading businesses. Above, the bank’s London headquarters at Canary Wharf. (Reuters)
Updated 18 July 2018
0

Morgan Stanley beats estimates on higher trading revenue

  • Morgan Stanley said net income rose to $2.4 billion in the quarter from $1.8 billion a year ago
  • Banks are benefiting from increased market volatility due in part to escalating trade tensions

NEW YORK: Morgan Stanley reported a better-than-expected quarterly profit on Wednesday, driven by gains in its fixed income and equities trading businesses, rounding up a strong earnings season for US banks.
JPMorgan Chase & Co, Bank of America Corp, Goldman Sachs Group Inc, Morgan Stanley and Citigroup Inc. have all reported second-quarter earnings which beat expectations, with only Wells Fargo & Co. missing estimates.
Banks are benefiting from increased market volatility due in part to escalating trade tensions causing investors to buy and sell assets to protect their portfolios and take advantage of opportunities. Morgan Stanley highlighted its equity financing business and a stronger performance in commodities and credit products.
Morgan Stanley said net income rose to $2.4 billion in the quarter from $1.8 billion a year ago. Earnings per share rose to $1.30 from $0.87 the year before, beating the average analyst expectation of $1.11 per share, according to Thomson Reuters I/B/E/S data.
Shares in Morgan Stanley were up 2.9 percent in premarket trading.
Chief Executive Officer James Gorman said the bank had seen strength across all its businesses and geographies.
“The second quarter performance reflected active markets and healthy client engagement,” he said in a statement.
Net revenue from the bank’s sales and trading business rose 18 percent to $3.8 billion, with fixed income and equity trading businesses recording gains of 12 percent and 15 percent.
Rival Goldman Sachs said on Tuesday its trading revenue rose 17 percent, with bond trading showing a 45 percent jump and equity revenue remaining flat in its second quarter.
Morgan Stanley’s net revenue rose 12 percent to $10.6 billion, with institutional securities accounting for 54 percent of the gains. Institutional securities business comprises the bank’s investment banking and trading units.
The bank said net revenue at its wealth management business rose to $4.3 billion from $4.2 billion a year ago.


Philips to close its UK factory in 2020, with loss of 400 jobs

Updated 17 January 2019
0

Philips to close its UK factory in 2020, with loss of 400 jobs

AMSTERDAM/LONDON: Dutch health technology company Philips said on Thursday it planned to close its only factory in Britain in 2020, with the loss of around 400 jobs, the latest firm to move manufacturing jobs out of Britain.
The move is part of a push by Philips to reduce its large manufacturing sites worldwide to 30 from 50, and a spokesman said the decision had no direct link with Britain’s decision to leave the European Union.
However, the company said in a statement that it had to “pro-actively mitigate the potential impact of various ongoing geopolitical challenges, including uncertainties and possible obstructions that may affect its manufacturing operations.”
The factory in Glemsford, Suffolk, produces babycare products, mainly for export to other European countries. Almost all its activities will move to Philips’ plant in Drachten, the Netherlands, which already employs around 2,000 workers.
“We have announced the proposal after careful consideration, and over the next period, we will work closely with the impacted colleagues on next steps,” said Neil Mesher, CEO of Philips UK & Ireland.
“The UK is an important market for us, and we will continue to invest in our commercial organization and innovation programs in the country.”
Once a sprawling conglomerate, Philips has transformed itself into a health technology specialist in recent years, shedding its consumer electronics and lighting divisions.
The firm has previously warned that Brexit would put Britain’s status as a manufacturing hub at risk.
Chief Executive Frans van Houten last year said that without a customs union — which has been ruled out by Prime Minister Theresa May — Philips would have to rethink its manufacturing footprint.
Britain is set to leave the EU on March 29, and politicians are at an impasse over how to do so after lawmakers overwhelmingly rejected May’s proposed withdrawal agreement on Tuesday.
Other firms have moved jobs out of Britain in recent weeks, sparking alarm among lawmakers that Brexit is impacting corporate decision-making.
Jaguar Land Rover has slashed UK jobs — mainly due to lower Chinese demand and a slump in European diesel sales — while Ford has said it will slash thousands of jobs as part of its turnaround plan.
While both decisions were driven by factors other than Brexit, each firm has also been vocal in warning of the risks of no-deal Brexit, where Britain leaves abruptly in March without a transition period.