Investors who thought that the return of John Mack to Morgan Stanley
All the same, Morgan Stanley's fourth-quarter results were quite good. Revenue surpassed even the high published estimate by more than $200 million, and reported earnings per share were well ahead of the analysts' peg.
The core institutional securities business, with 47% growth, boosted revenue the most. The performance was strong across the board, with good growth in advisory services, underwriting, and trading. Retail brokerage and asset management also posted growth, though not to the extent of the core investment banking franchise. The laggard in the quarter was the Discover credit card business, where a spike in bankruptcy filings and the higher cost of funds hurt results.
With three very different businesses under the same roof, it's a bit of a challenge to compare Morgan Stanley directly to the likes of Goldman Sachs
In any event, Morgan Stanley doesn't seem badly priced for a turnaround story -- provided that investors have the patience to let Mack execute his plans. In the short term, that will mean an intense focus on better revenue generation and the assumption of more risk. Over the long haul, the plan should translate into better-run businesses and a higher overall return.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).