11:29 AM EDT, 10/16/2024 (MT Newswires) -- Morgan Stanley ( MS ) posted stronger-than-expected third-quarter results on Wednesday amid higher asset levels and investment banking gains that reflected increased deal activity and initial public offerings.

Revenue climbed to $15.38 billion for the three months ended Sept. 30 from $13.27 billion a year ago and topped the $14.29 billion average analyst estimate on Capital IQ. Earnings per share advanced to $1.88 from $1.38 last year and beat the Street's $1.58 view. Shares of Morgan Stanley ( MS ) jumped 7.7% in Wednesday trade.

In the lender's wealth management division, net revenue increased 14% year over year to $7.27 billion reflecting higher asset levels, fee-based flows and transactional revenues. Net interest income declined to $1.77 billion from $1.95 billion last year due primarily to lower average sweep deposits.

Investment management revenue was up 9% to $1.46 billion as total client assets across wealth and investment management surpassed $7.5 trillion supported by "buoyant equity markets and net asset inflows," Chief Executive Ted Pick said in a statement.

Within investment management, assets under management reached $1.598 trillion compared with $1.388 trillion in the same period of 2023.

Institutional securities revenue increased to $6.82 billion from $5.67 billion in the same quarter last year. Investment banking revenue soared 56% to $1.46 billion amid stronger advisory revenues tied to completed M&A transactions, particularly in the Europe, Middle East and Africa region. Equity underwriting revenues climbed on increased IPO activity, according to the lender.

Fixed income revenue advanced 3% to $2 billion in reflection of "higher client engagement as our rates business navigated the markets well amidst shifting expectations around the size and the timing of the (Federal Reserve's) first rate cut," Chief Financial Officer Sharon Yeshaya told analysts on a conference call, according to a Capital IQ transcript.

Last month, the central bank's Federal Open Market Committee cut interest rates by 50 basis points.

In the fourth quarter, net interest income is expected to be modestly lower on a sequential basis "on the back of lower rate expectations, consistent with the forward curve," Yeshaya said on the call.

Price: 120.92, Change: +8.70, Percent Change: +7.75