Morgan Stanley said Wednesday it earned $617 million during the last three months of 2009 as its investment banking operations profited from its Smith Barney joint venture.

The results gave Morgan Stanley its second straight profitable quarter following a year of losses. The bank said it earned 29 cents a share on $6.8 billion in revenue. That was less than analysts' expectations of 36 cents on $7.8 billion in revenue, according to Thomson Reuters.

The company's stock fell 44 cents to $30.72 in pre-opening trading.

Investment banking, which is the bulk of Morgan Stanley's business, has been one of the few healthy segments in the struggling financial industry. JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. were able to use investment banking profits to offset losses from failed loans in recent quarters.

Investors have faulted Morgan Stanley for not profiting enough from investment banking and the stock market's big 2009 rally. The company has lagged industry leader Goldman Sachs Group Inc., which reports its fourth-quarter results on Thursday.

Morgan Stanley said its fourth-quarter revenue was hurt by an accounting charge resulting from the continuing improvement of credit markets. However, the bank said the Morgan Stanley Smith Barney joint venture more than doubled the revenues from its global wealth management operations to $3.1 billion.

"While the environment remains extremely fluid, we are confident the steps we have taken this year will ensure that Morgan Stanley remains well positioned," said Morgan Stanley CEO James Gorman, who replaced John Mack earlier this month. Mack remains chairman.

The bank reported its 2009 compensation expenses, including salaries and bonuses, rose 30 percent to $14.4 billion from $11.1 billion in 2008.

Revenue from Morgan's institutional securities business, which includes trading of stocks and fixed-income products, reached $3.2 billion in the quarter. That compares with $13.8 billion in negative revenue the same quarter a year ago; negative revenue reflects the impact of accounting charges. Meanwhile, revenue from underwriting securities nearly quadrupled from a year ago to $950 million.