Goldman Shares Jump After Beating Analyst Expectations In Bond Trading
Goldman Sachs reported third-quarter results on Tuesday that surpassed analysts’ expectations for profit and revenue. In terms of profits, the company reported a 43% decline to $3.07 billion, or $8.25 per share, exceeding the $7.69 estimate of analysts surveyed by Refinitiv. The company’s revenue dropped 12% to $11.98 billion, exceeding expectations by more than $500 million. A revenue decline for Goldman Sachs was expected after last year’s IPO boom slowed this year. Shares of the bank were up more than 4% in morning trading. According to Goldman CEO David Solomon, the results demonstrate the company’s “strength, breadth, and diversification” and formally announce a corporate reorganization. “Today, we enter the next phase of our growth, introducing a realignment of our businesses that will enable us to further capitalize on the predominant operating model of One Goldman Sachs,” Solomon said. “We are confident that our strategic evolution will drive higher, more durable returns and unlock long-term value for shareholders.”
The fixed-income traders at Goldman Sachs generated $3.53 billion in revenue, up 41% from the prior year and about $500 million more than analysts anticipated, as they took advantage of heightened client activity in bonds and currencies. Equities traders brought in $2.68 billion in revenue, a 14% drop from the year earlier that edged out the $2.59 billion estimate. The strong trading results more than offset a miss in investment banking, where revenue plunged 57% to $1.58 billion, below analysts’ $1.84 billion estimate. The bank’s other divisions, asset management, and consumer & wealth management, also topped expectations. Asset management revenue fell 20% to $1.82 billion on lower gains from private equity stakes, but that still exceeded expectations for $1.65 billion in revenue. Consumer & wealth management revenue rose 18% to $2.38 billion, topping the $2.19 billion estimate, helped by growing credit card balances and rising interest rates.