David Solomon, chief govt officer of Goldman Sachs Group Inc., on the Goldman Sachs Monetary Providers Convention in New York, Dec. 6, 2022.
Michael Nagle | Bloomberg | Getty Photographs
Goldman Sachs posted third-quarter revenue and income Tuesday that exceeded analysts’ estimates on stronger-than-expected buying and selling income.
Here is what the corporate reported:
Earnings: $5.47 a share, topping the $5.31 a share estimate from LSEG, previously often known as RefinitivRevenue: $11.82 billion vs. $11.19 billion anticipated
The financial institution mentioned revenue dropped 33% to $2.058 billion, or $5.47 a share, from a 12 months earlier. Income additionally slipped 1% to $11.82 billion, although that topped expectations by roughly $600 million.
Bond buying and selling income fell 6% from a 12 months earlier to $3.38 billion, however that was nearly $600 million greater than what analysts had anticipated. Goldman cited energy in rate of interest merchandise and mortgages, which helped offset declines in buying and selling of currencies, commodities and credit score.
Equities buying and selling income climbed 8% from a 12 months earlier to $2.96 billion helped by increased exercise in derivatives, topping the estimate by roughly $200 million.
Amongst its huge financial institution friends, Goldman Sachs is essentially the most reliant on funding banking and buying and selling income.
Whereas it is made efforts underneath CEO David Solomon to diversify its income stream, first in an ill-fated retail banking push and later because it emphasised progress in asset and wealth administration, it’s Wall Road that powers the corporate. Final quarter, buying and selling and advisory accounted for two-thirds of Goldman’s income.
That is been a headwind as mergers, preliminary public choices and debt issuance all have been muted this 12 months because the Federal Reserve boosted rates of interest to sluggish the economic system down. With indicators that exercise has picked up recently, analysts can be keen to listen to about Goldman’s pipeline of offers.
On the similar time, Goldman has taken hits from two areas: Its strategic retrenchment away from retail banking has saddled the agency with losses because it finds consumers for undesirable operations, and its publicity to industrial actual property has resulted in write-downs as nicely.
Final week, Goldman mentioned that its sale of lending enterprise GreenSky will end in a 19 cents per share hit to third-quarter outcomes.
“We proceed to make vital progress executing on our strategic priorities,” CEO David Solomon mentioned within the launch. “I additionally count on a continued restoration in each capital markets and strategic exercise if circumstances stay conducive.”
Analysts can be eager to listen to Solomon’s view on the funding banking outlook, in addition to how the remaining components of its client effort — primarily, its Apple Card enterprise — match within the newest iteration of Goldman Sachs.
Goldman shares have dropped 8.4% this 12 months via Monday, a greater displaying than the 21% decline of the KBW Financial institution Index.
Final week, JPMorgan, Wells Fargo and Citigroup every topped expectations for third-quarter revenue, helped by better-than-expected credit score prices. Morgan Stanley posts outcomes Wednesday.
This story is growing. Please test again for updates.