Goldman Sachs reports third-quarter earnings before opening bell
Date
10/17/2023 7:39:43 AM
(MENAFN) Goldman Sachs reported its third-quarter earnings before the opening bell, announcing earnings of USD5.47 per share, which surpassed analysts' expectations. Analysts had expected earnings of USD5.31 per share. Additionally, the company reported revenue of USD11.82 billion, exceeding the anticipated USD11.19 billion. This strong performance raised questions about whether Wall Street deal-making is on the mend.
Goldman Sachs, compared to its large banking peers, relies more heavily on investment banking and trading revenue. While the company has attempted to diversify its revenue streams under CEO David Solomon, it remains primarily reliant on Wall Street operations. In the previous quarter, trading and advisory activities constituted two-thirds of Goldman's revenue. This reliance on investment banking and trading has posed a challenge, particularly as mergers, initial public offerings, and debt issuances have been subdued this year due to the Federal Reserve's interest rate increases aimed at slowing down the economy. Analysts are now eager to hear about Goldman's deal pipeline, as recent signs suggest that deal-making activity may be picking up.
However, Goldman Sachs has faced challenges in two key areas. Its strategic shift away from retail banking has resulted in losses as the company seeks buyers for unwanted operations. Additionally, the firm's exposure to commercial real estate has led to write-downs. In the past week, Goldman disclosed that the sale of its lending business, GreenSky, would result in a 19 cents per share impact on its third-quarter results.
Investors and analysts will be closely watching for CEO David Solomon's perspective on the investment banking outlook. They will also seek insights into how the remaining elements of Goldman's consumer-focused efforts, particularly its Apple Card business, fit into the latest iteration of the company's strategy.
While Goldman Sachs shares have experienced an 8.4 percent decline year-to-date as of Monday, this performance has been relatively better than the 21 percent decline in the KBW Bank Index. In the past week, JPMorgan, Wells Fargo, and Citigroup each reported third-quarter profits that exceeded expectations, primarily due to better-than-expected credit costs. Morgan Stanley is scheduled to release its third-quarter results on Wednesday.
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