Morgan reports lower first quarter

Exceeding analyst expectations, Morgan Stanley reported first quarter net income of $1.5 billion, or $1.45 per diluted share, compared with $2.7 billion, or $2.51 per diluted share in the year-ago period. For last year's fourth quarter, the New York-based investment banking giant reported its first quarterly loss in 72 years in the midst of $9.4 billion in write-downs on subprime mortgages (InvestmentNews Dec. 20). In the first quarter, Morgan Stanley topped analyst earnings estimates of $1.03 a share. Revenue for the quarter ending Feb. 29 was $8.3 billion, 17% lower than the $9.9 billion it earned for its first quarter of 2007 but above analysts' estimates of $7.19 billion. While the firm’s asset management division posted a pre-tax loss of $161 million, Morgan Stanley’s total client assets for the quarter were $722 billion, a 5% increase from a year ago.