Earnings season is well under way, and we've already had a few big surprises. Many companies surprised investors with unexpected changes, and many simply didn't come close to their expected performance. Here's why Alcoa (NYSE:AA), Biogen (NASDAQ:BIIB), and Morgan Stanley (NYSE:MS) surprised our contributors with their third-quarter earnings.

Dan Caplinger (Alcoa): The earnings report that surprised me the most so far this season was the official first: lightweight-metals specialist Alcoa. In general, the declines in earnings and revenue for Alcoa weren't all that surprising given the headwinds the company has faced in the commodity markets recently. Yet what did come as a shock was the fact that the traditionally strong Engineered Products and Solutions segment, which makes up the key component of the company's key value-add business, saw operating income decline from year-ago levels despite strength in areas like automotive and aerospace.

Alcoa is largely looking forward rather than backward with a new focus on its planned break-up into two separate parts. Yet given that many investors had hoped the value-add side of the business would stand out from the more commoditized alumina and primary metals divisions on the upstream side of the business, the Engineered Products shortfall wasn't welcome news. Long-term shareholders will have to hope that the headwinds the unit faced were a result of one-time effects from recent acquisitions, and that once those new purchases are fully integrated into the overall business, Alcoa will be able to take maximum advantage and start generating increased profits from them.

Cheryl Swanson (Biogen): As a long-term investor in biotech powerhouse Biogen, I was surprised by the virtual tsunami of announced changes this quarter. In a bid to save $250 million in operating expenses, executives said it would be axing 11% of its workforce -- more than 800 jobs. The savings will be targeted toward a more intense focus on several high-risk targets -- particularly Alzheimer's R&D.

While Biogen needed a new strategy for future growth, this is anything but an easy pathway. A successful drug for Alzheimer's could exceed peak sales of $10 billion per year, but the field is littered with once-promising therapies that bombed out. Biogen also announced it would be walking away from some key development projects, including a Phase III program for Tecfidera in secondary-progressive MS.

Still, some of the surprises were good ones. The company surpassed both earnings and revenue expectations. Biogen's multiple sclerosis (MS) franchise sales also came in strong, despite facing growing competition from new therapies. While Biogen's management has a terrific track record of triumphing against the odds, this biotech has been traveling a rough road lately, and the new strategy introduces even more uncertainty. With Biogen's share price already having taken a beating over the last few months, investors will need to see if the company can pilot its way into a new -- and better -- future.

Matt Frankel (Morgan Stanley): Morgan Stanley really surprised me this earnings season, and not for the reasons you might think. Sure, many of the company's businesses saw revenue decline, but this is no different than the rest of the sector. Rather, I was surprised by just how bad Morgan Stanley's results were.

The analysts weren't even close. The rest of the big banks met expectations, or at worst, missed them narrowly. For example, rival Goldman Sachs missed earnings estimates by a penny per share, and revenue by about $270 million. On the other hand, Morgan Stanley missed earnings by $0.20 per share and revenue by a whopping $1.2 billion.

There were a few reasons for this. First, the bank's fixed income, currency, and commodities trading was a disaster, posting a 41.5% year-over-year drop. (For comparison, Goldman's FICC revenue fell by 33%.) Additionally, Morgan Stanley's investment management division actually lost money for the quarter (Goldman's earned a $670 million profit).

Management expressed their disappointment and frustration on the quarterly conference call, with CEO James Gorman saying the quarter was "probably ... the worst core FICC since the financial crisis" and "obviously disappointing."

As one would expect, Gorman made it clear that the bank intends to rebound from the bad performance, and it certainly could. However, the fact remains that the quarter was surprisingly bad, and you can't blame Morgan Stanley's investors for being concerned.

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