Morgan Stanley earnings fall — thanks to legal bills

Jan 17, 2014 16:06 UTC

Morgan Stanley reported earnings this morning, announcing that its quarterly profit fell to $192 million ( 7 cents per share) in the fourth quarter from $661 million (33 cents per share) in the same period of the previous year. The drop was largely due to some $1.2 billion in legal bills.

Here’s how Morgan Stanley’s quarter stacked up against rival bank Goldman Sachs:

Here is more detail about the bank’s earnings from Reuters:

Excluding items such as $1.2 billion in legal expenses, the bank earned 50 cents per share, according to Thomson Reuters I/B/E/S, beating the average analyst estimate of 45 cents.

Morgan Stanley shares, which have risen 56 percent in the past year, were up about 1 percent before the opening bell.

Morgan Stanley, which has been working to reduce its risk-weighted assets to below $200 billion by 2016, said it would now aim to reach that target by 2015.

The bank plans to reduce its risky holdings largely by shedding fixed-income assets that tie up too much capital under new banking regulations.

Chief Executive James Gorman has also been shifting the bank’s focus to less-risky products that can be traded electronically and cleared through exchanges.

Revenue from Morgan Stanley’s wealth management business, which has become increasingly important as the bank moves away from risky trading, rose 12.2 percent from a year earlier to $3.73 billion, accounting for 47.6 percent of total revenue.

The profit margin in that business was 20 percent, excluding an impairment charge. Gorman had set a target of at least 20 percent.

JPMorgan’s fourth quarter earnings hit by Madoff settlements

Jan 14, 2014 14:52 UTC

JPMorgan reported its fourth quarter earnings this morning, beating expectations despite the numerous regulatory penalties, including settlements related to the Madoff case.

Here’s Reuters with the details:

The bank, which agreed last week to pay $2.6 billion to settle government and private claims over its handling of accounts of fraudster Bernie Madoff, said fourth-quarter net income fell 7.3 percent to $5.28 billion, or $1.30 per share.

Adjusted for special items, the company earned $1.40 per share, beating the average analyst estimate of $1.35, according to Thomson Reuters I/B/E/S.

The results took into account gains from the sale of Visa Inc shares and One Chase Manhattan Plaza and legal expenses related to the Madoff settlements.

JPMorgan, which agreed to pay nearly $20 billion in 2013 to settle assorted legal claims, had estimated that settlement of the Madoff claims would subtract $850 million from fourth-quarter earnings.

Teens may have cooled on Facebook, but investors haven’t

Oct 31, 2013 13:59 UTC

As Reuters reports, Facebook’s stock was up as much as 15% in extended trading yesterday, despite some worrying new information about the site’s popularity. Facebook’s daily usage in the US has plateaued of late, and the company’s CFO said yesterday that young teens aren’t flocking to the site at the rate they once were:

The company reported better-than-expected results on Wednesday, helped by strong advertising revenue. But Chief Financial Officer David Ebersman later said there had been a decrease in daily users, specifically among younger teens.

Ebersman also said the company would not boost the frequency of ads — one per 20 stories in the newsfeed — shown to users.

 

As FastFT notes, more than a dozen investment banks raised their price targets on Facebook after their earnings release yesterday. Christopher Mims writes that Facebook’s ad sales growth was strong enough to overcome worries about the effectiveness of Facebook’s ads. Lydia DePillis points to this chart from the earnings release: US users are six or seven times more valuable to Facebook at this point than users in Asia or Latin America.

Jim Edwards of Business Insider argues that Facebook increasingly becoming a mobile product, not a desktop product. 49% of the company’s ad revenue now comes from mobile, the NYT writes, up from 41% the previous quarter. “Perhaps Facebook’s chief executive, Mark Zuckerberg, should ditch the hoodie and dress up as a mobile phone for Halloween.”

 

Apple’s earnings: higher sales, lower margins

Oct 29, 2013 14:17 UTC

Apple’s quarterly earnings were released yesterday, with results that were in line with forecasts but down significantly from this time last year. From Reuters:

Gross profit margin for the fourth quarter was 37 percent, down from 40 percent a year ago as intense competition from the likes of Samsung Electronics took a toll. That was roughly level with analysts’ average 36.9 percent forecast.

Compare that to the last four years:

Here’s more from Reuters: (more…)

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