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Morgan Stanley Closes Out Strong Q3 Earnings for Banks

Ian Wyatt

Just as in recent earnings seasons, Wall Street continues to set the bar low for the big banks – and those banks continue to clear that bar.

Morgan Stanley (NYSE: MS) was the sixth and final major U.S. bank to report third-quarter 2012 earnings today. And like the others, Morgan Stanley beat low analyst expectations.

The bank outpaced Wall Street estimates of 24 cents per share in earnings by four cents. However, because of all the debt that prompted Moody’s to downgrade its rating two notches back in June, Morgan Stanley technically reported a net loss of 55 cents per share on a debt valuation adjustment-weighted basis.

That seemed to drag the bank’s stock down a bit, as MS shares fell 1% in morning trading.

The other five big banks that reported earnings either earlier this week or late last week have seen their shares rise.

Fellow investment-banking giant Goldman Sachs (NYSE: GS) is up 4.4% this week. Citigroup’s (NYSE: C) stock has surged 10% since reporting on Monday – despite the fact that the bank’s Q3 profits declined 88% from a year ago.

And Bank of America (NYSE: BAC), which reported earnings yesterday, broke even on a per-share basis, but the shares rose slightly anyway because analysts were projecting a seven-cents-per-share loss.

So it was – another season of mediocre bank earnings beating low expectations. If you’re a big-bank shareholder, these days mediocre is good enough.

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