MS Beats Q2 EPS Expectations
Morgan Stanley (MS 27.49 +2.27) reported second quarter earnings this morning of $0.80 per share, $0.34 better than the Thomson Reuters consensus of $0.46.
Income from continuing operations includes $0.27 from Changes in Morgan Stanley's Debt-Related Credit Spreads and $0.20 from a Discrete Tax Benefit; revenues rose 53.0% year/year to $7.95 billion versus the $7.93 billion consensus. Net revenues in the current quarter included positive revenue of $750 million compared with negative revenue of $2.3 billion in the prior year's second quarter related to Morgan Stanley's debt-related credit spreads. The annualized return on average common equity from continuing operations was 12.2% in the quarter.
Sales and trading net revenues were $3.7 billion and included positive revenue of approximately $750 million related to DVA2 in the current quarter. Global Wealth Management delivered net revenues of $3.1 billion, with client assets of $1.5 trillion and 18,087 global representatives. Morgan Stanley's average aggregate trading and non-trading Value-at-Risk (VaR) level was $164 million compared with $169 million in the first quarter of 2010.
WFC Tops Q2 EPS Expectations
Wells Fargo (WFC 27.10 +1.19) reported second quarter earnings of $0.55 per share, $0.07 better than the Thomson Reuters consensus of $0.48.
Revenues fell 4.9% year-over-year to $21.39 billion versus the $21.4 billion consensus.
The company said, "We believe credit quality has indeed turned the corner, with net charge-offs declining to $4.5 billion, down 16% from first quarter and down 17% from last year's peak quarter, and we expect this positive trend will continue over the coming year... This quarter's significant reduction in credit losses confirmed our prior outlook and, in fact, we have seen credit quality improve earlier and to a greater extent than we had previously expected... Our capital ratios continued to build rapidly, with Tier 1 common reaching 7.53% and Tier 1 capital at 10.42%, even with the purchase of $540 million of Wells Fargo warrants auctioned by the U.S. Treasury... Several consumer portfolios increased during the quarter, including auto dealer services, private student lending and Wealth, Brokerage and Retirement... We saw other consumer portfolios declining at a lower rate, including Wells Fargo Home Mortgage, credit card, and consumer lines and loans. On the commercial side, for the first time this year, we saw an increase in lending activity and line usage."
YHOO Sees Q3 Revs In-line With Consensus
Yahoo (YHOO 14.00 -1.20) reported second quarter earnings of $0.15 per share after the close yesterday, $0.01 better than the Thomson Reuters consensus of $0.14.
On the top line, revenues fell 0.7% year-over-year to $1.13 billion versus $1.16 consensus.
For the third quarter, the company expects revenue of $1.105 billion to $1.165 billion ex TAC versus the $1.16 billion Thomson Reuters consensus.
Revenue for the third quarter of 2010 is expected to be in the range of $1.570 billion to $1.650 billion including TAC. Income from operations for the third quarter of 2010 is expected to be in the range of $160 million to $200 million. Total expenses (cost of revenue plus total operating expenses) for the third quarter of 2010 is expected to be in the range of $1.410 billion to $1.450 billion. Total expenses less traffic acquisition costs for the third quarter is expected to be in the range of $945 million to $965 million.
AAPL Easily Tops Q3 EPS Expectations
Apple (AAPL 251.89) reported third quarter earnings of $3.51 per share, $0.40 better than the Thomson Reuters consensus of $3.11.
Revenues rose 61.3% year-over-year to $15.7 billion, above the $14.75 billion consensus. Apple reported third quarter gross margins of 39.1% versus the Street estimates of 39.0%.
Apple reported 3.47 million Macs sold in the third quarter versus the Street estimates of approx. 3.2 million. Apple reported 8.4 million iPhones sold in the third quarter versus Street estimates of approx. 8.5 million.
For its fiscal fourth quarter, the company is expecting to earn approx. $3.44, lower than the $3.82 Thomson Reuters consensus. On the top line, the company expects to see revenue of approx. $18.00 billion, above the $17.03 billion Thomson Reuters consensus (Briefing.com note: Co typically issues conservative guidance).
The company said, "It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple's history with iPhone 4... iPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year."
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