Morgan Stanley misses Wall Street's expectations for 4Q

NEW YORK (AP) - Morgan Stanley reported a bigger fourth-quarter profit Tuesday as the investment bank recovered from some huge legal expenses last year. But it suffered from the same trading slowdowns seen at other banks in the most recent quarter and fell short of Wall Street expectations.

The bank reported adjusted net revenues of $599 million in the quarter, down from $694 million a year ago. Equity sales and trading, a key part of Morgan Stanley's business, saw a modest increase in revenue from a year ago, to $1.6 billion from $1.5 billion a year ago.

The Wall Street investment bank earned $1.05 billion, or 47 cents a share. That compares with a profit of $95 million, or 2 cents a share, in the same period last year.

Revenue was $7.76 billion, down from $7.84 billion last year.

Wealth Management, which includes Morgan Stanley's Smith Barney franchise, reported a modest rise in profits as well. The division earned $736 million versus $715 million a year ago.

Morgan Stanley's results were impacted by several one-time items and accounting adjustments. Adjusted for one-time items, the bank earned 39 cents a share, well short of the 56 cents per share that analysts were looking for, according to a poll by FactSet.

For the full year, Morgan Stanley earned $6.15 billion in 2014 compared with $2.98 billion the year before. Firm-wide sales and revenue for the year was $34.28 billion, up from $32.49 billion a year ago.

Morgan Stanley shares fell 95 cents, or 3 percent, to $34.89 in premarket trading.