updated 12/20/2005 1:42:10 PM ET 2005-12-20T18:42:10

Wall Street investment firm Morgan Stanley saw its fourth quarter earnings climb 49 percent, the company said Tuesday, due to strong investment banking revenues and a surge in fixed-income trading.

Full-year earnings, however, were lower than expected as Morgan Stanley struggled in the first half of the year before a fresh start under current Chief Executive John Mack.

For the fourth quarter ending Nov. 30, Morgan Stanley saw after-tax net earnings of $1.79 billion, or $1.68 per diluted share, compared to $1.2 billion, or $1.09 per share, in the year ago period. Revenue rose 28 percent to $6.96 billion from $5.42 billion a year ago.

The quarterly earnings included a one-time tax benefit of $280 million, or 26 cents per share, due to the repatriation of $4 billion of foreign earnings allowed under the American Jobs Creation Act, the company said.

Even with the one-time benefit, the company easily surpassed Wall Street's expectations. Analysts surveyed by Thomson Financial had predicted earnings of $1.08 per share on revenue of $6.51 billion.

For the full year, the company earned $4.26 billion, or $3.95 per share, compared to $4.49 billion, or $4.06 per share, in 2004. Revenue rose 13 percent to $26.78 billion from $23.71 billion a year ago.

Analysts surveyed by Thomson Financial had predicted full-year earnings of $4.29 per share on revenue of $26.40 billion.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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