Morgan Stanley's second-quarter profit soared as the bank rebounded from a year-earlier quarter marred by merger charges and the repayment of government funds.
Shares rose 2.7% to $25.90 premarket as earnings solidly beat analysts' expectations. As of Tuesday's close, the stock had fallen 15% so far this year.
Morgan Stanley's results differ from the muted results most banking giants have posted so far, with rival Goldman Sachs Group Inc. on Tuesday posting its lowest earnings since the peak of the financial crisis.
Morgan Stanley, whose second-quarter earnings topped Goldman's, had recently been helped by rising fixed-income trading revenue, bolstered by the hiring of hundreds of traders late last year to help regain market share lost when the bank cut back risk during the financial crisis.
Morgan Stanley reported a profit of $1.96 billion, or $1.09 a share, up from $149 million a year earlier. The most-recent quarter's results include an after-tax gain of $514 million related to the sale of its retail asset-management business. On a continuing operations basis, earnings were 80 cents a share.
Revenue jumped 53% to $7.95 billion, boosted by the Morgan Stanley Smith Barney joint venture.
Analysts polled by Thomson Reuters had most recently forecast earnings of 46 cents a share on $7.93 billion in revenue.
The bank's institutional-securities business, which includes capital markets and investment banking, saw revenue rise 52% as it swung to a $1.57 billion profit.
The global-wealth-management arm saw revenue jump 60% amid the brokerage combination and it also swung to the black.