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Morgan Stanley Misses Estimates on Drop in Bond Trading Revenue

Morgan Stanley reported profit that missed analysts’ estimates as it followed competitors in posting a drop in fixed-income trading revenue and said it had a loss in its Asian private-equity investments.

Net income fell to $1.02 billion, or 48 cents a share, from $1.69 billion, or 83 cents, a year earlier, the New York-based company said Monday in a statement. Excluding an accounting gain, profit was 34 cents a share, missing the 63-cent average estimate of 23 analysts surveyed by Bloomberg.

Morgan Stanley joins rivals including Goldman Sachs Group Inc. and JPMorgan Chase & Co. in reporting a drop in bond-trading revenue as credit spreads widened. Chief Executive Officer James Gorman has sought to cut the amount of capital his trading unit requires in order to boost returns.

“It was a difficult quarter,” Devin Ryan, an analyst at JMP Group Inc. in New York, said in an interview before the results were announced. “I...