Morgan Stanley posts massive third-quarter earnings beat

Morgan Stanley on Wednesday posted third-quarter earnings that beat expectations by the largest margin in nearly five years on booming equities trading, investment banking and wealth management results.

Here’s what the company reported:

• Earnings per share: $2.80 vs. $2.10 LSEG estimate
• Revenue: $18.22 billion vs. expected $16.70 billion

The bank said profit surged 45% from a year earlier to $4.61 billion, or $2.80 per share. Revenue rose 18% to a record $18.22 billion.

Wall Street trading desks have seen high levels of activity in the quarter, while investment banking continues to see a resurgence in mergers and IPOs. Stocks at or near record highs bolstered Morgan Stanley’s giant wealth management division as well.

Put together, Wall Street-centric banks like Morgan Stanley and peer Goldman Sachs are in an ideal environment.

Morgan Stanley said equities trading revenue jumped 35% to $4.12 billion, or $720 million more than what analysts surveyed by StreetAccount had expected. The company cited increased activity across business lines and regions and record results in its prime brokerage business that caters to hedge funds.

Fixed income trading rose 8% to $2.17 billion, essentially matching the StreetAccount estimate.

Investment banking revenue in the quarter jumped 44% from a year earlier to $2.11 billion, about $430 million more than the StreetAccount estimate. The bank cited more completed mergers, more IPOs and more fixed income fundraising as drivers for the quarter.

Wealth management revenue rose 13% to $8.23 billion, about $500 million more than expected, as rising asset levels and transaction fees bolstered results.

Shares of Morgan Stanley have climbed almost 24% this year before Wednesday.

On Tuesday, JPMorgan Chase, Goldman, Citigroup and Wells Fargo each posted earnings that topped analysts’ expectations for earnings and revenue.

This story is developing. Please check back for updates.