Morgan Stanley just reported first-quarter earnings that beat analyst expectations, despite a huge decline in profit.
The firm reported diluted earnings per share of $0.55 on revenue of $7.88 billion.
Analysts were expecting adjusted earnings per share of $0.47 on revenue of $7.76 billion, according to Bloomberg.
The results are down significantly from the same quarter last year, when Morgan Stanley reported diluted earnings per share earnings of $1.18 on revenue of$9.91 billion. 
Net income of $1.1 billion was down 54% from $2.4 billion last year.
"The first quarter was characterized by challenging market conditions and muted client activity," said CEO James Gorman in a statement. "Against that backdrop, our businesses delivered stable results."
He continued:
While we see some signs of market recovery, global uncertainties continue to weigh on investor activity. We remain focused on executing against our priorities, helping clients navigate difficult markets while controlling our expenses and managing risk prudently.
Morgan Stanley beat expectations on investment-banking and sales-trading revenues, but results were lower than the same period last year:
  • Trading revenues were $2.69 billion for the quarter (versus $2.65 billion expected), down from $4.08 billion in the year-ago quarter.
  • Fixed-income sales and trading revenues came in at $873 million (versus $791 million expected), down from $1.9 billion a year ago.
  • Equity sales and trading revenues were $2.1 billion ($1.86 billion expected), down from $2.3 billion in the same quarter last year.
  • Investment banking revenue came in at $990 million for the quarter (versus $982 million expected). That's down from $1.17 billion in the year-ago period.
Revenues in wealth management, typically Morgan Stanley's strongest division, were $3.67 billion, down 4% from $3.83 billion in the year-ago quarter.
Last quarter, Morgan Stanley beat expectations, reporting diluted earnings per share of $0.43 on revenue of $7.86 billion, excluding accounting adjustments.
The first quarter is typically the strongest for investment banks, but has been unusually weak on Wall Street so far this year. Choppy trading conditions in early 2016, fears over China's growth, and a collapsed oil price created a "perfect storm" for banks. More on that here.
JPMorgan, Bank of America, Wells Fargo, and Citi have already reported first-quarter earnings, each beating or matching analyst expectations despite significant declines in profit.
Goldman Sachs will report Q1 earnings on Tuesday.

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