Goldman Sachs Q3 Results Top Estimates
Goldman Sachs Group Inc. (GS) reported a profit for the third quarter that increased 94 percent from last year, reflecting higher investment banking and fixed income trading revenues. Quarterly net revenues rose 30 percent, due to higher net revenues across all segments.
Both quarterly earnings per share and revenue topped analysts’ expectations.
Net earnings applicable to common shareholders for the third-quarter increased 94 percent to $3.48 billion from last year’s $1.79 billion, with earnings per share improving to $9.68 from $4.79 in the prior year. Analysts polled by Thomson Reuters expected the company to report earnings of $5.57 per share for the third-quarter. Analysts’ estimates typically exclude special items.
Provision for credit losses was $278 million for the third quarter of 2020, compared with $291 million for the third quarter of 2019, reflecting reserve reductions from paydowns on corporate lines of credit and consumer installment loans, partially offset by reserve increases from individual impairments related to wholesale loans and growth in credit card loans.
Net revenues for the third quarter were $10.78 billion, up 30 percent from last year’s $8.32 billion, reflecting higher net revenues across all segments, including significant increases in Asset Management and Global Markets. Analysts expected revenues of $9.46 billion for the third-quarter.
Net revenues in Investment Banking were $1.97 billion for the third quarter, 7 percent higher than the third quarter of 2019, due to significantly higher net revenues in Underwriting, partially offset by significantly lower net revenues in Corporate lending and Financial advisory.
Net revenues in Global Markets were $4.55 billion for the third quarter, 29 percent higher than the prior year, due to continued strength in Fixed Income, Currency and Commodities and Equities.
Net revenues in Asset Management were $2.77 billion for the third quarter of 2020, 71 percent higher than the previous year, reflecting significantly higher net revenues in Equity investments and Lending and debt investments, and higher Management and other fees from the firm’s institutional and third-party distribution asset management clients.
Net revenues in Consumer & Wealth Management were $1.49 billion for the third quarter of 2020, 13 percent higher than the third quarter of 2019.
On October 13, Goldman Sachs declared a dividend of $1.25 per common share to be paid on December 30, 2020 to common shareholders of record on December 2, 2020.
In Wednesday pre-market trade, GS was trading at $215.40, up $4.59 or 2.18 percent.
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