Morgan Stanley reported net income of $1,468 million for the quarter ended February 28, 2005, up 20% from the first quarter of 2004 and 22% from the fourth quarter of 2004.
Diluted earnings per share were $1.35 compared with $1.11 a year ago and $1.09 in the fourth quarter. The annualized return on average common equity was 20.7 percent in the current quarter, compared with 19.2 percent in the first quarter of 2004 and 17.4 percent last quarter. The quarter’s results included a $49 million (after-tax) benefit from the cumulative effect of an accounting change for equity-based compensation resulting from the Company’s adoption of SFAS No. 123(R).
Net revenues (total revenues less interest expense and the provision for loan losses) of $6.8 billion were 10 percent higher than last year’s first quarter and 26 percent ahead of last year’s fourth quarter. Non-interest expenses of $4.7 billion were 8 percent higher than a year ago and 24 percent above last quarter. The quarter included a $260 million charge related to the Sunbeam/Coleman litigation, as well as a cumulative $109 million expense as a result of a correction in the method of accounting for rent escalation clauses and rent-free periods included in certain real estate leases (lease adjustment). Expenses in the quarter were reduced by $251 million as a result of the settlement of the Company’s insurance claims related to the events of September 11, 2001 (insurance settlement).
Philip J. Purcell, Chairman and CEO, said, “Profits were excellent, led by a record quarter in fixed income and Discover. We continue to see growth opportunities across our businesses.”
Murdok | Breaking eBusiness News
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