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.
This is what the corporate reported:
- Earnings: $5.47 a share, topping the $5.31 a share estimate from LSEG, previously often called Refinitiv
- Income: $11.82 billion vs. $11.19 billion anticipated
The financial institution stated revenue dropped 33% to $2.058 billion, or $5.47 a share, from a yr earlier. Income additionally slipped 1% to $11.82 billion, although that topped expectations by roughly $600 million.
Bond buying and selling income fell 16% from a yr earlier to $3.38 billion, however that was virtually $600 million greater than what analysts had anticipated. Goldman cited power in rate of interest merchandise and mortgages, which helped offset declines in currencies, commodities and credit score buying and selling.
Amongst its large financial institution friends, Goldman Sachs is essentially the most reliant on funding banking and buying and selling income.
Whereas it is made efforts below 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 Avenue 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 yr because the Federal Reserve boosted rates of interest to sluggish the financial system down. With indicators that exercise has picked up recently, analysts will probably be keen to listen to about Goldman’s pipeline of offers.
On the identical time, Goldman has taken hits from two areas: Its strategic retrenchment away from retail banking has saddled the agency with losses because it finds patrons for undesirable operations, and its publicity to industrial actual property has resulted in write-downs as effectively.
Final week, Goldman stated 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 stated within the launch. “I additionally count on a continued restoration in each capital markets and strategic exercise if situations stay conducive.”
Analysts will probably 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 yr by means of Monday, a greater exhibiting 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.
