James Gorman, chairman and CEO of Morgan Stanley.Getty

Morgan Stanley released fourth-quarter earnings Thursday, and, like the rest of the big Wall Street banks, it beat analyst expectations with adjusted earnings of $0.84 a share.

Analysts had been expecting Morgan Stanley to produce adjusted earnings of $0.77 a share.

“Over the course of the full year we achieved the strategic objectives outlined two years ago. In 2017, pre-tax earnings grew by 18%, driven by a 10% increase in revenues, with growth across all our business segments,” CEO James Gorman said. “This, coupled with strong expense discipline demonstrates the firm’s operating leverage. We enter 2018 with strong momentum aided by rising interest rates, tax reform and an evolving regulatory framework.”

Morgan Stanley is the last to report of the big US banks, and like the others, its non-adjusted earnings took a one-time hit from tax reform.

But Morgan Stanley’s net $1.2 billion loss on the new tax law — primarily from deferred tax assets that declined in value — came in below the $1.25 billion that analysts projected and well below its Wall Street counterparts.

The bank’s fixed income sales and trading took a big hit in the fourth quarter, with revenues falling 46% to $808 million. Fixed income suffered across Wall Street, but Morgan Stanley’s decline is on par with Goldman Sachs’ 50% drop — a historically bad quarter in bond trading.

Here are the highlights:

  • Net revenues of $9.5 billion, beating estimates of $9.24 billion
  • Adjusted net income of $1.7 billion, beating estimates of $1.43 billion
  • Wealth management revenues of $4.4 billion, a new record
  • Investment banking revenues of $1.4 billion, up 7.7% from $1.3 billion last year
  • Fixed income sales and trading net revenues of $808 million, down 46% from $1.5 billion last year
  • Equity sales and trading net revenues of $1.9 billion, down 5% from $2.0 billion last year

This story is developing.

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