Morgan Stanley's Earnings Preview: Estimates See 21% YoY Surge

Morgan Stanley MS is scheduled to announce its second quarter financial results on Monday before the market opens. Although expectations point towards a sequential decline in earnings, both the Street and the crowd are anticipating a year-over-year surge of more than 21 percent (Estimize).

In the second quarter of 2014, earnings came in at $0.60 per share, while revenue reached $8.608 billion. For the current quarter, Wall Street experts are modeling consensus earnings of $0.73 per share on sales of $8.965 billion. The crowd is more bullish, and projects consensus earnings of $0.77 per share on revenue of $9.218 billion.

It should be noted from the chart that, the fourth quarter of 2014 aside, Morgan Stanley has tended to surpass consensus estimates.

Related Link: What To Expect From Goldman Sachs, Morgan Stanley Earnings

The Important Of Equity Trading & Underwriting

In a recent note, Susquehanna analysts Doug Sipkin and Justin LaSalle-Tarantin previewed Morgan Stanley’s results. Their expectations now seem relatively bullish as equity trading and underwriting remain strong.

The firm models earnings of $0.75 per share, above the Street’s consensus, on revenue of $9.2 billion.

The analysts comment, “Overall trading revenues should be up nicely from last year driven by an easy comparable in fixed income as well as strong secondary equity activity driven by international markets (…) Global wealth should be up marginally driven by net interest income.” The firm models ROE of 8.8 percent for the quarter.