The entity had reported a net loss of USD 558 million in the year-ago period.
However, Morgan Stanley's revenues in the April-June quarter plunged 24.45 per cent to USD 6.95 billion.
In a statement, the company said quarterly results included positive revenue of USD 350 million related to changes in Morgan Stanley's debt-related credit spreads and other credit factors.
The quarterly figures also included a negative adjustment of about USD 1.7 billion, related to conversion of certain stocks.
"Although global economic uncertainty remains a headwind, we are pro-actively positioning the firm for success. Our businesses showed resilience in key areas during the quarter, and we made progress against strategic goals," Morgan Stanley Chairman and CEO James P Gormand said.
Following its rating downgrade by Moody's last month, Morgan Stanley said it kept an additional collateral of USD 2.9 billion with its counter-parties involved in derivative trading. The total collateral that could be asked by counter-parties was USD 6.3 billion.
The firm declared a quarterly dividend of five cents per common share.