Morgan Stanley Reports Large Drop In Net Income For Q2

New York, NY (AHN) -Morgan Stanley (MS) reported net income for the second quarter of $1.03 billion or 95 cents per share. Earnings for the same period last year were $2.45 a share.

The company reported Wednesday revenue of $6.51 billion for the quarter ended May 31. The revenue number was much lower than the $7.05 billion analysts expected according to a Thomson Financial poll. Revenue in the same quarter and year ago was $10.5 billion.

The majority of the second quarter profit is attributed to the sale of two business units, generating $1.49 billion of pretax income for the company. Without those transactions Morgan's profit may have only been a couple of pennies a share according to some analysts.

Morgan's equity sales and trading division saw the largest decline in business, producing 39 percent less revenue in the second quarter compared to the last quarter.

Investment banking business also dropped 11 percent.

"This was a quarter where we wanted to preserve book value, get our balance sheet in fine health and preserve shareholder value," said Morgan Stanley Chief Financial Officer, Colm Kelleher.

The company said in the past quarter they reduced leverage and increased capital and liquidity. They also stated they have no plans to raise more capital and their quarterly dividend will remain at 25 cents a share.

Shares of Morgan Stanley opened lower but rallied and trade slightly positive coming into Wednesday's close.