Tomahawk, WI 10/21/2013 (BasicsMedia) – Morgan Stanley (NYSE:MS) with a market cap of around $58.15 billion, has released its third quarter financial results. One lesson I got by looking at the company’s financials is that it appears to be back to profitability. Secondly, I attribute the company’s strong performance to the fact that MS has gone back to the basics. This policy was always going to reward MS and it was only a matter of time before it started reporting improved profits and better revenue every quarter. All the same, I will be the first to ask whether this news worth celebrating by investors.

Morgan Stanley benefits from New Leadership

Companies report profits once and everyone gets excited, only for the successive financial reports to show declining profits or losses. This is quite common in the financial sector hence my belief that one needs to take a close look at different aspects of a company to determine whether its stock is profitable for the long term or not. Since MS got a new leader at the helm, in James P. Gorman, it changed its focus away from high-risk businesses. Since Gorman took leadership at MS, he has ensured that the company’s wealth management services experiences steady growth.

Morgan Stanley Performs Better than Goldman Sachs

The financial results posted by MS for the three-month period ending on September 30, 2013 need to be examined hand in glove with those of its erstwhile competitor, Goldman Sachs. When Goldman Sachs released its financial results, what emerged is that its results were nowhere near the expectations of both industry experts and Wall Street analysts. I was among the group that got disappointed since I had expected Goldman Sachs to release better financial results than it did. MS achievements must be measured against those of its competitors for better appreciation.

MS’ operational income in the current quarter stands at an impressive $1 billion. This is equivalent to 50 cents a share and outperforms the 40m cents a share that Wall Street analysts had mentioned earlier. Last year at such a time as this, MS faced uncertainty when it was among the banks asked to take measures to rein in on the kind of exposure they have towards volatile markets. The bank’s adjusted total revenue for this period is an impressive $8.1 billion, which is a massive improvement on the $5.29 billion it reported last year.

Morgan Stanley Makes Profits

MS’ adjusted total revenue for the three-month period ending September 30, 2013 is better than the $7.6 billion Wall Street analysts had projected. More importantly, the firm says it raised $862 million as profits during this financial quarter. This is another impressive amount bearing in mind that last year, during the same quarter, MS reported a loss of $1 billion. I believe that MS would have reported better revenue than it did were it not for the Federal Reserve expected actions, which squeezed its profits, as well a stha5 of other major U.S. banks.

The bank has done relatively well in its equity trading business that has posted steady gains inn the last three months, and is expected to continue on the same path for some time.

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