Morgan Stanley earned USD 1.4 billion, up from USD 1.2 billion in the same period a year ago. The figures exclude accounting adjustments related to the value of the bank's debt.
The earnings were equivalent to 68 cents per share. That easily beat the 61 cents per share analysts were expecting, according to FactSet, a financial data provider.
Revenue from continuing operations was USD 8.8 billion, ahead of the USD 8.5 billion analysts had expected.
All major segments of Morgan Stanley's business increased.
Institutional securities, the name of Morgan Stanley's trading, M&A advisory and stock sales division, grew the most.
That division earned USD 1.2 billion versus USD .1 billion a year ago. The firm's fixed-income and commodities division reported a larger-than-expected rise in revenues this quarter: USD 1.7 billion from USD 1.5 billion a year ago.
Wealth management, which includes Morgan Stanley Smith Barney, had pre-tax income of USD 691 million versus USD 597 million a year ago.
The firm also announced it would buy back USD 1 billion of its own stock as well as increase its quarterly dividend to 10 cents per share. Morgan Stanley's stock rose USD 1.01, or 3.4 per cent, to USD 30.80 in pre-market trading.