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Morgan Stanley Clears Lowered Expectations But Profit, Revenue Fall

Morgan Stanley Chairman and CEO James Gorman has been working to boost profitability by trimming...

Earnings and revenue beat subdued expectations, pushing shares up 1.7%.

The bank’s net income declined to $1.58 billion, or 75 cents a share, from $1.81 billion, or 85 cents a share, a year ago. Analysts polled by Thomson Reuters had expected a per-share profit of 59 cents.

Revenue tumbled 8.6% to $8.91 billion, but topped the $8.3 billion forecast by analysts.

Morgan Stanley, the last of the major U.S. banks to report earnings, didn’t get the trading bump most of its rivals reported. Trading revenue fell 7.1% to $3.26 billion from $3.5 billion a year ago. Excluding an accounting adjustment, trading revenue fell 2%.

Still, analysts expected an even sharper drop. In fixed income and commodities trading, where the firm has cut staff and set a $1 billion quarterly revenue target, Morgan Stanley reported second-quarter revenue of $1.3 billion.

“There was a general...