Morgan Stanley said Thursday that its earnings increased 60 percent during the last three months of 2010 on strong investment banking results.
Morgan Stanley's net income available to shareholders was $600 million, or 41 cents a share, on revenue of $7.8 billion in the fourth quarter. That was more than analysts' expectations of 40 cents a share on $7.4 billion in revenue, according to analysts surveyed by FactSet.
Morgan Stanley's results were in contrast to those from rival Goldman Sachs Group Inc., which reported weak investment banking results in its earnings release Wednesday.
Morgan's revenue from debt underwriting increased 15 percent to $370 million, mostly because of increased junk bond issuance, while revenue from equity underwriting rose 5 percent to $661 million.
However, its revenue from advising on such activities like mergers and acquisitions dropped 9 percent to $484 million.
Morgan netted $1.1 billion from equity sales and trading, up from $774 million in the same quarter last year.
The investment bank paid $16 billion in bonus and fees to its employees for the year, up from $14 billion a year ago. The bank said that it had restructured how it compensates employees by including a provision where it can take back a portion of the pay if employees didn't meet goals and standards.
It also reduced cash bonuses and increased the amount of deferred compensation. In 2010, the average amount of deferred compensation increased to 60 percent from 40 percent in 2009.
Morgan's stock gained 40 cents, or 1.4 percent, to $28.15 in pre-market trading.
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