Goldman Sachs took a hit to its trading business, as expected. The bank saw a 26% year-on-year decline in fixed income, currency and commodity revenues, to $1.45 billion. That was comparable with the drop at the likes of Bank of America (-22%) and ...and more »
Goldman Sachs Group, Inc. Chairman and Chief Executive Officer Lloyd Blankfein participates in a panel discussion during the White House Summit on Working Families in Washington June 23, 2014.Jonathan Ernst/Reuters
Goldman Sachs reported third-quarter earnings results Tuesday, posting earnings per share of $5.02, way ahead of the $4.19 number expected by analysts.
“Our overall performance this year has been solid and provides a good foundation on which to execute and deliver our growth initiatives,” said Lloyd Blankfein, chairman and chief executive officer.
The biggest driver of the beat was a surge in investing and lending revenue.
"I&L was far and away the biggest driver of the quarter's revenue upside," Credit Suisse analysts said in a note after the results.
Here are the key figures:
Revenues: $8.3 billion, above the $7.5 billion expected.
Net income: $2.1 billion, higher than the $1.7 billion expected.
Investing and lending had its best performance in three years, with $1.9 billion in revenues, up 35% year-on-year. That was driven by gains from investments in private equities, which Goldman said were "positively impacted by corporate performance and company-specific events."
Investment banking revenues were $1.8 billion, up quarter-on-quarter and year-on-year.
Institutional client services, which can be thought of as the sales and trading business, had $3.1 billion in revenues, up quarter-on-quarter, but still down year-on-year.
Goldman Sachs took a hit to its trading business, as expected. The bank saw a 26% year-on-year decline in fixed income, currency and commodity revenues, to $1.45 billion. That was comparable with the drop at the likes of Bank of America (-22%) and JPMorgan (-27%).
"Although market-making conditions improved in most businesses compared with the second quarter of 2017, Fixed Income, Currency and Commodities Client Execution continued to operate in a challenging environment characterized by low levels of volatility and low client activity," the bank said in a statement.
Still, third quarter FICC revenues were an improvement on the terrible second quarter.
Here's a breakdown of Goldman's FICC revenue in recent quarters:
Q3 2017 - $1.45 billion
Q2 2017 — $1.16 billion
Q1 2017 — $1.685 billion
Q4 2016 — $2 billion
Q3 2016 — $1.96 billion
Q2 2016 — $1.93 billion
Q1 2016 — $1.66 billion
Q4 2015 — $1.12 billion
Get the latest Goldman Sachs stock price here.
business cards business casual business business insider business letter format business plan template business casual women business news business casual men business plan