INSTANT VIEW: Morgan Stanley results beat expectations

NEW YORK (Reuters) - Morgan Stanley on Tuesday posted a 3 percent decline in quarterly profit, but results beat expectations and the shares rose almost 9 percent in extended trade.

The second-largest U.S. investment bank reported net income of $1.43 billion, or $1.32 a share, for the quarter ended August 31, down 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 earnings of 78 cents per share on revenue of $6.3 billion in the period, according to Reuters Estimates.

The following is reaction from industry analysts:

KEITH WIRTZ, PRESIDENT AND CHIEF INVESTMENT OFFICER, FIFTH

THIRD ASSET MANAGEMENT, WHICH MANAGES $22 BILLION

"Between Goldman Sachs and Morgan Stanley, we are getting some modest positive news in what has been an otherwise dark five-day period. The irony with John Mack is that when he came back and wanting to fix Morgan's business model and franchise, the one thing that was distinct and an underperformer back in Morgan Stanley's earlier years was the lack of aggressive, proprietary trading.

"In certain respects, they may have served their purposes pretty well because they didn't get caught with all the distressed assets that everyone is dealing with right now."

TOM SOWANICK, CHIEF INVESTMENT OFFICER, CLEARBROOK FINANCIAL

LLC, PRINCETON, NEW JERSEY:

"Morgan Stanley's reported much better than expected earnings than anyone would have envisioned. The early release demonstrates the shifting landscape as who is the best of breed. The real gem was the $13.7 billion increase in net new wealth management assets."

MARSHALL FRONT, CHAIRMAN FRONT BARNETT ASSOCIATES, CHICAGO

"This is great news for the whole financial sector."

"I think the key to this whole thing was that they looked better than Goldman Sachs' earnings earlier in the day."

CHIP HENDON, SENIOR PORTFOLIO MANAGER, ANALYST, HUNTINGTON

ASSET MANAGEMENT, WHICH MANAGES $15 BILLION

"Morgan Stanley had their turnover issues a year ago. It may be possible that they, through sheer coincidence, lucked out in respect that because they had some internal issues... their risk tolerance came down a lot. They were first to go in a more conservative route, but ended up being the right play." WILLIAM LEFKOWITZ, OPTIONS STRATEGIST, BROKERAGE FIRM vFINANCE

INVESTMENTS

"Morgan announced earnings early which were better than what Wall Street was looking for. In addition, the firm made some comments that seemed to have calm Wall Street. For example, they said they continue to maintain strong liquidity. Today many option investors were buying puts anticipating a tremendous share drop after their earnings release. Strike prices between $30 and $15 were very active in the September contracts and all were trading more than their open interest, indicating fresh positions. It could also be that investors were protecting their long stock positions."

(Reporting by Elinor Comlay, Jennifer Ablan, Doris Frankel)