The investment bank and brokerage giant reported a net loss applicable to common shareholders of $177 million, or 57 cents a share, for the first quarter. Revenue fell 62 percent from a year earlier to $3.0 billion.
Analysts on average expected a loss of 9 cents a share, according to Reuters Estimates.
Morgan Stanley cut its quarterly dividend to 5 cents a share.
Morgan Stanley reported net income of $1.41 billion, or $1.26 per share, in the comparable calendar quarter last year.
These are the first results Morgan has released on a calendar-year basis since it became a bank holding company to help survive the stormiest weeks of the financial crisis last fall.
Morgan Stanley shares, which fell 3 percent in premarket trade, have fallen by half over the past 12 months. The stock has surged 54 percent this year, including a recent rally sparked by higher-than-expected profit at Goldman Sachs Group Inc
(Editing by John Wallace)