Goldman Sachs Q3 Profit and Revenue Blow Away Expectations

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October 18, 2016 9:21am NYSE:GS

Goldman Sachs logoFinance giant Goldman Sachs Group Inc (NYSE:GS) today posted much better-than-expected third quarter earnings results, driven by strong growth in its Investing & Lending segment.


The New York City-based company reported adjusted Q3 EPS of $4.88, blowing away Wall Street’s estimates of $3.83. Revenue rose 19% from last year to $8.17 billion, also easily topping analysts’ view of $7.41 billion.

Goldman also noted that return on equity (RoE) was 11.2% for the third quarter of 2016, and 8.7% for the first nine months of 2016.

On the Investment Banking side of things, GS said its Q3 net revenue was $1.54 billion, unchanged from last year. Institutional Client Services revenue surged 17% from last year to $3.75 billion, while Investing & Lending net revenues more than doubled from Q32015 to $1.40 billion.

Meanwhile, operating expenses of $5.30 billion were 10% higher than last year, while net provisions for litigation and regulatory proceedings fell all the way to $46 million from $416 million.

From the press release:

“We saw solid performance across the franchise that helped counter typical seasonal weakness,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer. “We continue to manage our balance sheet conservatively and are benefiting from the breadth of our offerings to clients.”

Like many financial services firms, Goldman has struggled amid several years of ultra low interest rates, which have decimated the fixed income markets and made it very difficult for income investors.

GS-2016-10-18

Goldman Sachs shares rose $2.53 (+1.50%) to $171.53 in premarket trading Tuesday. Prior to today’s report, GS had fallen 6.23%, versus a 4.16% gain in the benchmark S&P 500 during the same period.


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