Oh poor Morgan Stanley. It loos like it took a big hit on own credit (again) as well as the repurchasing of its Tarp capital.
From the release:
NEW YORK–(BUSINESS WIRE)–Morgan Stanley (NYSE: MS) today reported a loss from continuing operations applicable to Morgan Stanley for the second quarter ended June 30, 2009 of $159 million, or $1.37 per diluted share (reflective of preferred dividends and other adjustments),1 compared with income from continuing operations applicable to Morgan Stanley of $689 million, or $0.61 per diluted share, a year ago. Net revenues for the quarter were $5.4 billion, compared with $6.1 billion in last year’s second quarter. Non-interest expenses were $6.0 billion, compared with $5.2 billion a year ago. Compensation expenses were $3.9 billion, compared with $3.1 billion a year ago. Non-compensation expenses increased slightly from a year ago. Comparisons of current quarter results to prior periods are impacted by the results of the Morgan Stanley Smith Barney joint venture (MSSB), which closed on May 31, 2009.
Morgan Stanley’s results for the three months ended June 30, 2009 reflect a number of significant items, including, among others:
* Negative revenue of $2.3 billion, or $1.32 per diluted share, related to the continued tightening of Morgan Stanley’s credit spreads on certain of its long-term debt (MS debt-related credit spreads).2
* A negative adjustment of $0.74 per diluted share for the accelerated amortization of $850 million related to the issuance discount on the Company’s Series D Preferred Stock resulting from the repurchase of capital issued under the Capital Purchase Program (TARP).
For the first six months of 2009, loss from continuing operations applicable to Morgan Stanley was $345 million, or $2.00 per diluted share, compared with income from continuing operations applicable to Morgan Stanley of $2,084 million, or $1.85 per diluted share, a year ago. Net revenues decreased 40 percent to $8.4 billion and non-interest expenses decreased 10 percent to $9.9 billion.
Net income for the quarter was $33 million, compared with $1,159 million in the second quarter of 2008. Net income applicable to Morgan Stanley for the quarter was $149 million, or a loss of $1.10 per diluted share, compared with net income applicable to Morgan Stanley of $1,143 million, or $1.02 per diluted share, in the second quarter of 2008. Net loss for the first six months of 2009 was $157 million, compared with net income of $2,591 million a year ago.3 For the first six months of 2009, net loss applicable to Morgan Stanley was $28 million, or $1.71 per diluted share, compared with net income applicable to Morgan Stanley of $2,556 million, or $2.28 per diluted share a year ago.
That old Morgan Stanley bugbear — real estate losses — also look to have continued in the period, albeit at a slower rate. Losses in the quarter were $0.7bn, compared with about 1bn last quarter.
Morgan Stanley’s Q2 is one of three big US banking results out today, Wednesday. Bank of New York Mellon, incidentally, has already reported its own Q2 earnings today – EPS of $0.23 and net income of $176m, down from $309m the year before. Wells Fargo reported record net income of $3.17bn on the back of their Wachovia acquisition.
Related links:
Citi reports Q2 net income of $4.3bn, EPS $0.49 – FT Alphaville
BofA reports Q2 net income of $3.2bn, EPS $0.33 – FT Alphaville
JP Morgan reports Q2 net income of $2.7bn, EPS $2.8 – FT Alphaville
Goldman reports Q2 EPS of $4.93 – FT Alphaville