real-time news and commentary for investors
Thursday, Oct 17
Big trading revenue drop hits Goldman
- A big miss on revenue has Goldman (GS) off 3% in early trades after the release of Q3 earnings, even as the bank tries to soften things with a 10% dividend boost. Blankfein: "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."
- Investment banking revenue of $1.17B is roughly unchanged from a year ago, with advisory (M&A) business way down and underwriting (IPO) business way up. The backlog "increased significantly" from Q2.
- Institutional client services revenue of $2.86B fell 32% Y/Y, led by a 44% decline in FICC revenue to $1.25B (even worse than already-weak Street estimates). "FICC operated in a challenging environment, which was characterized by economic uncertainty, difficult market-making conditions in certain businesses and lower levels of activity." Indeed.
- Ouch! Compensation expense of $2.38B fell 35% from a year ago. The ratio of compensation and benefits to total revenue is 41% over the year's first nine months vs. 44% a year ago.
- Q3 results, press release.
- Conference call at 9:30 ET.