Morgan Stanley upbeat after better-than-expected results

Morgan Stanley, the Wall Street investment bank and stock broker, yesterday sounded an upbeat note about the prospects for recovery in its markets next year after delivering better-than-expected fourth-quarter results.

"We feel that the trends have bottomed, and we're probably going to move up from here," said Steve Crawford, the company's chief financial officer. "It feels like there's more stability and health in the market than there was three months ago."

Full-year net income fell for the first time since 1993, by 34 per cent to $3.61bn (£2.48bn) and from last year's record of $5.46bn.

However, heavy cost-cutting saw fourth-quarter earnings per share come in well ahead of expectations at $0.78, against forecasts of $0.66. Revenues in the period fell 17 per cent, whereas salaries fell 20 per cent. Investment banking continued to suffer, with advisory revenues down 44 per cent year-on-year over the past three months.

Morgan Stanley, which employs more than 61,300 people, has cut 1,000 jobs over the past three months. Philip Purcell, the chairman, hinted there were further redundancies to come. "We have focused on reducing expenses throughout 2001 and we will continue this effort in 2002," he said.