Goldman Sachs Banking and Investment Management Drive Earnings

Goldman Sachs, America’s largest investment bank reported better thane expected third quarter earnings before the bell Tuesday. Concerns exist over $GS equity trading revenue. These are the first earnings under new CEO David Solomon.

Goldman Sachs, America’s largest investment bank reported better thane expected third quarter earnings before the bell Tuesday. Concerns exist over $GS equity trading revenue. These are the first earnings under new CEO David Solomon.

GS Revenue Q3 18 

 Goldman  Investment Revenues Jump in Q3

Goldman Sachs Group Inc NYSE: GS Report Beat Before Open Tuesday

$6.28 Beat Expected $5.38 EPS AND $8.646 Billion Beat $8.40 Billion Forecast in Revenue 

Earnings

Goldman Sachs Group Inc. (NYSE: GS) third quarter results saw EPS rise to $6.28 a share as revenue climbed to $8.646 billion. as Investment banking revenue beat expectations. Fixed-income trading revenue was light. Analysts were forecasting $5.38 in earnings per share (EPS) on $8.4 billion in revenue. Goldman shares have had a 52-week trading range of $210.95 to $275.31.

This is the first quarterly earnings release under the new CEO David Solomon and his new management team. Though it was the last operating quarter under Lloyd Blankfein. The conference call will therefore focus more on future strategy. Asset management and consumer banking are expecting to be at the forefront.

Goldman Sachs Group Inc NYSE: GS

Market Reaction > Pre-market 218.08 +2.86 (+1.33%)

Highlights

  • Total non-interest revenues improved 3% to $7.7 billion
  • Net interest income increased 17% to $856 million.
  • Operating expenses grew 4%  due to higher non-compensation expenses.
  • Investing and lending division made $1.86 billion in revenue, beating the $1.78 billion estimate. The division houses the firm’s Marcus consumer lending business, benefited from a 56 percent surge in net interest income to $700 million as the firm extended more credit to retail customers.
  • Investment management generated $1.7 billion in revenue beating the $1.66 billion estimate. The division contains an asset management business and private wealth management, rose 12 percent from the year earlier on growing fees from management and more assets under supervision.
  • Trading produced $3.1 billion in revenue, shy of analysts’ $3.16 billion estimate, driven by underperformance in the fixed-income business. That unit produced $1.31 billion in revenue, a 10 percent decline from a year earlier that missed expectations by $100 million.
  • Goldman blamed “significantly lower” demand for interest-rate products and lower demand for credit and mortgage trading.
  • Equities trading revenue produced $1.79 billion, 8 percent higher than a year earlier and $60 million above expectations, from stronger demand for derivative trading.
  • Annualized return on average common shareholders’ equity was 13.1% for the quarter while book value per common share as of September 30 was $186.62.

GS Earnings Q3 18

Goldman Sachs Group Inc NYSE: GS Q2 Earnings Recap

Earnings

Goldman reported EPS of $5.98 on revenue of $9.4 billion beating forecasts of $4.67 EPS on revenue of $8.7 billion. Net revenues of $9.40 billion were 19% higher than the second quarter of 2017 and the highest second quarter in nine years.

  • Reaction: Goldman Sachs Group Inc NYSE: $GS 
  • Pre-market $230.98 −0.46 (-0.20%)

 Highlights

  • Fixed-income, currency and commodities trading revenue jumped 45% to $1.68 billion
  • Equities trading revenue was flat at $1.89 billion.
  • Investing and lending revenue rose 23% to $1.94 billion.
  • Investment management revenue rose 20% to $1.84 billion.
  • The firm ranked first in worldwide announced mergers and acquisitions for the year-to-date. The firm also ranked first in worldwide equity and equity-related offerings, common stock offerings and initial public offerings for the year-todate.
  •  Investment Banking produced net revenues of $2.05 billion (third highest quarter), reflecting strong net revenues in both Financial Advisory and Underwriting.
  • Assets under supervision increased to a record $1.51 trillion.
  • First half diluted EPS increased 42% compared with the first half of 2017 to a record $12.93.
  • First half annualized ROE (1) of 14.1% was the highest in nine years.
  • Book value per common share increased by 4.1% during the quarter and 7.4% during the year-to-date to $194.37.

 Goldman Q2 Revenue 2018

“Solid performance across all of our major businesses drove the strongest first-half returns in nine years. With a healthy economic backdrop and deep client franchises, the firm is well-positioned to invest in attractive opportunities to meet the needs of our clients and continue to generate earnings growth.” ~ Lloyd C. Blankfein, Chairman and Chief Executive Office

Last month the Federal Reserve restricted the payout plans of  $GS after the bank’s numbers they submitted for annual stress tests fell below Fed targets. The Fed opted not to fail the bank regardless, instead giving them a “conditional” pass.

Goldman Sachs First Quarter 2018 Recap

Earnings

EPS of $6.95 on revenue of $10.04 billion. Investment banking revenue rose 5% to $1.79 billion Ahead of expected EPS of  $5.67 on revenue of $8.89 billion,

Goldman Sachs Group Inc NYSE: $GS  

April 17, 9:48 AM EDT 260.09 ▲ 2.10 (0.81%)

Highlights:

  • Fixed income, currencies and commodities revenue rose 23% to $2.07 billion
  • Equities revenue leapt 38% to $2.31 billion, 
  • Investing and lending revenue surged 43% to $2.09 billion.
  • Investment management revenue rose 17% to $1.77 billion.
  • Quarterly dividend was raised 6.7% to 80 cents a share.
  • Annualized ROE (1) of 15.4% was the highest in over five years. 
  • Diluted earnings per common share were $6.95, the third highest quarterly performance.
  • Book value per common share increased by 3.2% during the quarter to $186.73. 

“We are well positioned to serve our clients as the global economy continues to show strength and central banks unwind certain aspects of policy stimulus,  We are also broadening our client base and further diversifying our businesses to drive more revenue and earnings growth for the firm.” Chairman and CEO Lloyd Blankfein said in a statement.

Goldman Sachs Q1 2018 Earnings

The bank rally had been fueled by expectations for easier regulations including a possible repeal of DoddFrank and infrastructure spending. The Federal Reserve decision to raise rates has also helped banks.  The new surge in home prices has also buoyed optimism for the mortgage business and banks profits thereto. Tax cuts, a stronger economy and higher interest rates have helped banks’ earnings. Bank of America reported results on Monday.

Goldman’s results follow earnings on Friday from following money center banks JPMorgan Chase $JPM. Wells Fargo $WFC, PNC Financial $PNC and  $C.  Bank of America $BAC reported bouyant results on Monday.

Source: Goldman Sachs, AlphaStreet


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