US investment bank Morgan Stanley on Wednesday said quarterly profit dropped 34 percent amid reduced trading revenue, falling well short of Wall Street's already-lowered expectations after a summer of sluggish market activity.
New York-based Morgan Stanley also said it reached an agreement in principle with the New York Stock Exchange on its failure to comply with certain prospectus delivery rules, operational deficiencies and other matters.
The firm, which paid $19 million in the NYSE settlement, said talks have not concluded and there is no assurance a resolution will be reached. The company's shares 5.3 percent before the bell.
Net income dropped to $837 million in the fiscal third quarter ended AugUST from $1.27 billion in the same period last year.
Morgan Stanley's results are especially disappointing after its rival Goldman Sachs posted a surprisingly strong 30 percent increase in earnings. Morgan Stanley's shares fell $2.78 to $49.60 in pre-market trading.