Morgan Stanley (NYSE:MS) is expected to release third-quarter earnings the week of Oct. 19. So far projections are that the bank will turn a profit this quarter.
Key items affecting the earnings report, according to
The Wall Street Journal, are:
- This is the first full quarter that the bank will report Smith Barney's results (which could drive up expense levels)
- losses from real estate investments
- and profit from ramped up risk-taking
Analysts polled by Thomson Reuters
estimate Morgan Stanley will report a profit of 30 cents a share, but several analysts think the end results could be much lower.
FBR Capital Markets Corp.'s (NASDAQ:FBCM) Steve Stelmach expects Morgan Stanley to report earnings of 26 cents a share for the third quarter, stating that competition from medium-sized brokers will affect revenue, according to
Reuters. Keefe, Bruyette & Woods Inc. (NYSEE:KBW) analyst Robert Lee predicts Morgan Stanley will earn 20 cents per share in the
third quarter and that the bank will lose 89 cents per share for the full
year, according to
BusinessWeek. Meanwhile, Barclays plc (NYSE:BCS) analyst Roger Freeman lowered his estimate to 26 cents and Fox-Pitt's David Trone moved his estimate to 42 cents, according to
The Street.
There's likely to be questions during the call concerning the bank's strategy going forward as Morgan Stanley has been
building up its retail banking team and may also decide to
acquire the rest of Smith Barney in the future. The strategy may change when new CEO James Gorman steps into office in January. Reports are that he could
lower risk-taking as the bank builds up its brokerage operations, which could lower the bank's profits, but that could also be in line with any changes in financial regulation.
- Maria Woehr
Follow me on Twitter @newsgirlmw
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