Morgan Stanley swung to a first-quarter profit as the investment bank rebounded from a year-earlier quarter that included huge real-estate and debt-related write-downs.
Shares were up 3.3% to $31.45 premarket. As of Tuesday's close, the stock had risen 24% in the past year.
Morgan Stanley is still experiencing pains as it focuses on improving its performance, reorganizing its trading unit and regaining lost market share from the financial crisis.
Barclays Capital said in a recent report that revenue levels likely started strong but tailed off as the quarter wore on, similar to the company's fourth quarter of last year. In that period, Morgan Stanley was slammed by $1 billion of real-estate net losses and a $1.5 billion accounting loss on the rising value of its own debt.
Morgan Stanley reported a profit of $1.85 billion, or 99 cents a share, compared with a year-earlier loss of $17 million, or 57 cents a share. Earnings were $1.03 a share on a continuing-operations basis and included a $382 million benefit associated with prior-year undistributed earnings of some subsidiaries that were reinvested abroad.
Revenue more than tripled to $9.08 billion due to the Morgan Stanley Smith Barney joint venture.
Analysts polled by Thomson Reuters had most recently forecast earnings of 57 cents on $7.94 billion in revenue.
The bank's institutional securities business, which includes capital markets and investment banking, saw revenue more than triple while the segment swung to a $2.07 billion profit from a $464 million loss.
