NEW YORK 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)