Morgan Stanley (MS, $47.55) beats analyst's estimates (barely)

Despite a 9% drop on the quarterly earnings, Morgan Stanley, the sixth largest U.S. bank, managed to marginally beat analysts’ estimates.

Morgan Stanley's wealth management business salvaged earnings for the quarter, as it accounts for almost half of the bank’s revenue and helps maintain stability during weak periods for trading and investment banking -- the two segments that suffered during the first quarter due to subdued volatility. Besides the resilience of the wealth management sector, the bank also managed to cut non-interest expenses by 4%, which helped boost its bottom line.

MS's two important metrics reported estimate beating results - quarterly profit came at $2.34 billion, or $1.39 per share versus estimate of $1.17 per share; and revenue fell 7% to $10.29 billion versus an estimate of $9.93 billion.

Overall, wealth management proved to be the only sector that could protect margin against an unfavorable backdrop owing to slowing global economy, absence of interest hike this year, and trade disputes between U.S. and China. Despite this scenario, Morgan Stanley’s wealth management profit margin and its return on equity of 13.1% were comfortably within the targeted range. Perhaps this is also the reason why the company’s CEO has not lifted performance targets for wealth management because the business can produce returns of nearly 25% even in difficult times. Wealth management revenue rose slightly from a year ago, with profit margins holding steady at 27%.

In short, Morgan Stanley is in a better position even than its top rival Goldman Sachs Group (GS), which reported a 20% profit decline and lower revenue across nearly all its major businesses, sending its shares down more than 3%.