Goldman Shares Slide on Q3 Results
Shares of Goldman Sachs (NYSE:GS) traded sharply to the downside on Thursday morning following a sluggish third quarter earnings report. The infamous investment bank posted $1.52 billion in net income, or $2.88 a share, compared to $1.51 billion, or $2.85, in the third quarter last year. Goldman’s results beat the $2.43-per-share earnings expected by analysts on the street. However, topline issues made waves through the financial markets. Net revenue declined by 20% year-over-year to $6.72 billion.
Goldman’s investment banking business was flat and with a slight increase in investment management revenue. The company saw a 44% drop in revenue from trading in bonds, currency and commodities. The bank looked to satisfy investor concerns by stating that “economic uncertainty, difficult market-making conditions in certain businesses and lower levels of activity.”
Chief Executive Officer, Lloyd Blankfein, looked to soften the blow with a 10% increase in the company’s dividend. He would later comment on the quarter by stating “The Q3 results reflected a period of slow client activity … Still, we saw various signs that our clients are prepared to act on significant transactions and we believe that the firm is well positioned to help our clients accomplish their objectives.”
Over the last week we have seen mixed results from the financial sector. J.P. Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) both reported strong results excluding one time events on Monday. J.P. Morgan saw its net income decline as a result of legal expenses. Whereas Wells Fargo reported record third quarter, result as a result of cost cutting and revenue generation. Shares of Goldman Sachs traded lower by 2.25 percent to $159 per share at the time of this writing. The S&P 500 was up by just over two points in contrast. Heading into the weekend, expect Wall Street’s analyst to pour into the result and issue guidance on Monday.
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