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Q1 Earnings Checklist Before the Market: MS, BLK, USB

Zacks

Wednesday, April 19, 2017

Investment banker Morgan Stanley MS posted a nice, tidy beat on top and bottom lines this morning, posting earnings of an even $1.00 per share on $9.745 billion. The Zacks consensus estimates were for 90 cents per share and $9.1 billion, respectively. These are typically solid numbers for Morgan, which averages a 23.6% positive earnings surprise over the previous four quarters.

Trading volume activity was cited as a positive for Morgan Stanley in the quarter, which is something analysts found lacking in Goldman Sachs’ GS disappointing Q1 report yesterday. Growth in trading revenues for Q1, according to a graph put up by CNBC’s Squawk Box earlier this morning, showed -7% for Goldman but +9% for Morgan. (BofA was again very strong in trading growth, due largely to their vast market, at +38%.)

BlackRock BLK also posted an earnings beat before the bell this morning, reporting $5.25 per share — 31 cents higher than the Zacks consensus. Revenues came in a tad light, however — its $2.82 billion missed the $2.88 billion we were looking for. Assets under management of $5.4 trillion showed $64 billion invested in iShares. This was the best bottom-line beat in the past 5 quarters for BlackRock.

U.S. Bancorp USB also reported earnings, beating on earnings by 2 cents to 82 cents per share in Q1. The bank also beat on the top line to $5.32 billion; the Zacks consensus estimate was for $5.29 billion.

Pre-markets are still feeling the brunt of IBM’s IBM miss after the bell yesterday. Big (but shrinking?) Blue missed badly on both top and bottom lines: $2.38 per share on $18.16 billion were a far cry from the $3.15 on $19.87 billion expected. The technology major seems to be dimming quicker than expected — reducing product lines while maintaining its essential legacy business, but without yet the big results investors had been expecting from things like its cloud computing business.

IBM had seemed to right the ship of 11 straight earnings misses when it finally broke to the positive last year, but this is a pretty tough Q1 to swallow. Shares are down 5.2% in the pre-market. For more on IBM’s earnings results, click here.

Mark Vickery
Senior Editor

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