Morgan Stanley reported late Tuesday that net income for its fiscal third quarter, which ended Aug. 31, dropped 7% from a year earlier, of $1.43 billion, or $1.32 a share.

However, the results easily topped Wall Street expectations.

"Despite unprecedented market conditions, Morgan Stanley's core client franchise achieved solid revenue growth, profitability, and ROE this quarter. Our people delivered particularly strong performance across our prime brokerage, commodities, foreign exchange, and equities businesses, and we saw continued growth in our international business," said John J. Mack, Morgan Stanley's chairman and chief executive.

"We have continued to actively reduce our legacy positions and carefully manage our risk, capital and liquidity."

Revenue rose 1%, to $8.05 billion.

Analysts polled by Thomson Reuters on average had expected Morgan Stanley to post earnings of 78 cents a share on $6.32 billion of revenue.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.