Reuters: Global Markets: Morgan Stanley swings to second-quarter profit

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Morgan Stanley swings to second-quarter profit Jul 19th 2012, 12:18 Tweet Share this Email Print Related News Morgan Stanley posts $3.7 billion collateral since downgrade 8:18am EDT Analysis & Opinion Goldman's pay-earnings balancing act looks wobbly Here come the downward U.S. GDP revisions again Related Topics Hot Stocks » Asian Markets » Morgan Stanley's New York headquarters are seen at the corner of 48th Street and Broadway in New York May 22, 2012. Credit: Reuters/Andrew Burton Thu Jul 19, 2012 8:18am EDT (Reuters) - Morgan Stanley swung to a profit in the second quarter, though revenue declined 24 percent due to a slowdown in trading and dealmaking. The investment bank reported earnings of $564 million, or 29 cents per share, compared with a loss of $558 million, or 38 cents per share, in the year-ago quarter. Morgan Stanley also lost money in the first quarter. The latest results included a $350 million gain from changes in Morgan Stanley's credit spreads, but earnings generally beat what many analysts had been expecting. Revenue fell to $6.95 billion from $9.21 billion a year earlier. Revenue from merger advisory dropped 51 percent to $263 million, revenue from underwriting fell 34 percent to $621 million, and equity trading revenue fell 34 percent to $1.22 billion. Wealth management and asset management revenue also fell. Morgan Stanley said as a result of its credit ratings being downgraded in June, it posted $2.9 billion of extra collateral with trading counterparties in derivatives. Its counterparties were entitled to ask for $6.3 billion under its agreements with them. Moody's Investors Service cut its ratings on the bank to "Baa1," three steps above junk, on June 21 as part of a broad re-evaluation of banks exposed to capital markets businesses like stock and bond trading. Morgan Stanley's 2011 second-quarter results included a charge linked to the bank's conversion of preferred stock owned by Japan's Mitsubishi UFJ Financial Group into common stock. (Reporting By Lauren Tara LaCapra; Editing by Maureen Bavdek and John Wallace) Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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