Morgan Stanley Rises on Earnings Beat, Preferred Conversion

Morgan Stanley, operator of the world’s largest brokerage, rose in New York trading after reporting profit that beat analysts’ estimates and saying a Japanese bank agreed to convert a preferred stake in the firm.

First-quarter net income was $968 million, or 50 cents a share, and adjusted earnings of 46 cents topped analysts’ average estimate of 40 cents. Net income included a 26-cent loss tied to a joint venture with Mitsubishi UFJ Financial Group Inc., which agreed to convert $7.8 billion of preferred stock and eliminate $784 million in annual dividend payments for Morgan Stanley.