Morgan Stanley profit falls 3 percent

NEW YORK Tue Sep 16, 2008 6:28pm EDT

The exterior of the world headquarters for Morgan Stanley & Co. Incorporated is seen in New York, May 19, 2008. REUTERS/Lucas Jackson

The exterior of the world headquarters for Morgan Stanley & Co. Incorporated is seen in New York, May 19, 2008.

Credit: Reuters/Lucas Jackson

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NEW YORK (Reuters) - Morgan Stanley said on Tuesday its third-quarter earnings fell nearly 3 percent, trouncing expectations, even as the year-old credit crunch slowed deal activity to a crawl and created one the toughest trading environments in decades.

The No. 2 U.S. investment bank reported income from continuing operations fell to $1.43 billion, or $1.32 a share, for the quarter ended August 31, from $1.47 billion, or $1.38, a year earlier.

Net revenue rose 1 percent to $8.0 billion from last year.

Analysts, on average, looked for revenue of $6.3 billion, according to Reuters Estimates.

Morgan Stanley shares closed down 11 percent Tuesday.

Rival Goldman Sachs said third-quarter earnings dropped 70 percent, marked by sharply lower banking, trading and investment results.

(Editing by Jeffrey Benkoe)

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