Morgan Stanley (MS
) on Sept. 20 became the latest financial services firm to report stronger than expected results in recent weeks.
The New York company said its diluted earnings per share (EPS) from continuing operations were $1.75 during the three months ended Aug. 31 compared with $1.09 a year ago. "Despite challenging market conditions, Morgan Stanley achieved its best third quarter ever," John J. Mack, Chairman and CEO, said in a press release.
The stock surged 1.8% to $73.13 per share in early trading on the New York Stock Exchange.
Standard & Poor's noted that the results reflected "solid performance from most segments and lower expenses than we anticipated." Analyst Mark Hebeka hiked his earnings estimates and 12-month target price on the stock to $75 from $70 per share. He maintained a hold opinion on the stock. (S&P, like BusinessWeek.com, is owned by The McGraw-Hill Companies.)
Morgan Stanley's results follow other recent good news from financial services firms. Bear Stearns (BSC
) reported EPS of $3.02 for the third quarter ended Aug. 31, 2006, up 12% from $2.69 per share for the third quarter of 2005. Lehman Brothers Holdings (LEH
) reported on Sept. 13 that it earned $916 million in the quarter, up 4% from the same quarter last year, on revenues of nearly $4.2 billion, up 8% from last year. Goldman Sachs Group (GS
) on Sept. 12 posted mixed results, but beat analyst expectations. The firm's net earnings slipped 1% for the quarter to $1.6 billion, while net revenues inched up 2% to nearly $7.5 billion.
The summer months are typically a slow season for financial services firms, with many away on vacation instead of doing deals. Uncertainty about energy prices, inflation and the global economy has roiled markets in recent months.