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The New York Times dissects Morgan Stanley's disappointing third quarter earnings. Revenues for the company's fixed-income trading desk dropped by 20 percent from a year earlier, making it the worst quarter since the financial crisis for the division. The underperformance serves as a stark reminder that despite the scaling back of trading operations, these divisions can have an outsized impact on the total firm's profits.
Mr. Gorman told Mr. Mayo that he hoped investors did not focus too much on the bad quarter. “I would hope that they would think of it in context of 23 quarters that this management team has presided over,” he said. “It was a very unusual macro environment, the volatility in China was almost historic.”After the call, though, investors sent Morgan Stanley’s stock down by around 6 percent in morning trading. The firm’s overall revenue dropped 13 percent from the same quarter a year earlier, and 20 percent from the previous quarter; the drop was even sharper after accounting for certain customary adjustments for debt valuations.
http://www.nytimes.com/2015/10/20/business/dealbook/morgan-stanley-q3-earnings.html?_r=1
