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Earnings Roundup: Morgan Stanley, Procter & Gamble

Both companies post solid numbers as the economy continues to recover.
(Ken Wolter)
(Ken Wolter)
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Morgan Stanley announced Q4 profits grew 51% from a year earlier, WSJ reports.

Numbers To Consider:

  1. The New York-based bank reported a profit of $3.39 billion on revenue of $13.64 billion.
  2. Analysts at FactSet had predicted revenue of $11.58 billion.

Morgan Stanley’s success marks another turnaround of a major U.S. bank affected by the turbulent market caused by Covid-19. Overall, it benefited from a continued recovery on Wall Street and “federal pandemic-response measures that forestalled the worst-case economic scenario.”

Proctor & Gamble saw a sales increase of 8% in the quarter ending Dec. 31, WSJ reports.

Numbers To Consider:

  1. The company posted sales of $19.8 billion against analyst expectations of $19.98 billion.
  2. P&G’s net income was $3.9 billion or $1.47 a share, an improvement from $1.41 a share in the year prior.

“Despite a tough economic picture and high unemployment, the maker of Gillette razors and Pampers diapers said consumers are increasingly willing to pay more for products. And P&G, armed with extra cash following years of downsizing and solid sales, has been churning out a range of high-end items.”

Justin Oh:

Morgan Stanley ($MS) and Goldman Sachs ($GS) are doing very well on the backs of how well the equity markets are doing. They generally have high net worth and institutional clientele and have benefited from increased trading, corporate deals, and equity issuances like SPACs and IPOs. 

This is as opposed to more consumer-focused banks like Bank of America ($BAC) and Wells Fargo ($WFC), which are affected by broader unemployment in the lower and middle classes as well as extremely low interest rates.

P&G’s relatively high-growth quarter and apparent pricing power is quite interesting. On one hand, people are staying at home more and might be buying more consumer staple products. But on the other hand, is this finally an early sign of consumer inflation as a result of all the stimulus? We will continue monitoring this trend…

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