Morgan Stanley on Wednesday said profit rose 17 percent, beating expectations, as booming merger activity and record trading income lifted total revenue to an all-time high, offset by weakness in brokerage and money management businesses.
Separately, the New York-based firm said in a regulatory filing that it offered to buy oil products marketing and transportation company TransMontaigne Inc for $8.50 a share. Morgan already owns 10 percent of the company, which had a market value of about $368 million at Tuesday's close.
It was nearly one year ago that former Chief Executive Philip Purcell launched a management shake-up that sparked a rebellion by shareholders prompting dozens of executives to quit and ultimately led to his own ouster last June. Since then new CEO John Mack has overseen three quarters of improving results amid a global mergers boom and resilient debt markets.
Morgan Stanley, the third-largest US investment bank by market value, said net income rose to $1.64 billion, or $1.54 a share, in the first quarter that ended February 28, from $1.40 billion, or $1.29 a share, in the year-ago period.
"Morgan Stanley took advantage of a strong market environment," Mack said in a statement, "and we see substantial opportunities to further improve our performance."
Analysts, on average, expected Morgan Stanley to report operating earnings of $1.20 a share on revenue of $7.57 billion, according to Reuters Estimates.
Non-interest expenses surged 27 percent to $6 billion amid higher compensation. Morgan recorded $395 million in incremental costs related to stock compensation. The quarter also included a $139 million accrual for the estimated cost of 2006 awards to be granted at year end. Excluding those extra costs, Morgan Stanley said it earned $1.90 billion, or $1.79 a share.