Goldman follows JPMorgan with strong profit above $3 billion
Filed under: Company News, Earnings, Goldman Sachs
Goldman Sachs Group Inc.'s (GS) third-quarter earnings rose 73 percent from the depths of the financial crisis as income from the company's trading operations offset a drop in its investment banking business.Goldman's stock fell three percent early Thursday as investors reacted to the slide in investment banking revenue, the result of a general slowness in takeover activity. Goldman also had $5.35 billion in compensation expenses during the July-September period.
Shares were trading at $186.48 before the market's open after closing Wednesday at $192.28.
Goldman earned $3.03 billion, or $5.25 per share, easily beating analysts' expectations for a profit of $4.24 per share. The bank earned $810 million, or $1.81 per share during its fiscal third quarter last year, which ended in August. During the peak of the credit crisis last fall, Goldman became a bank holding company and changed to calendar quarterly reporting periods.
The company said fixed income, commodities and currency trading buoyed its profits for the second straight quarter.
Investment banking revenue, traditionally the foundation of the company's business, fell to $899 million in the third quarter. The results were 31 percent worse than similar quarter last year as the credit crisis was worsening and 38 percent worse than the most recent quarter.
Goldman attributed the drop to a decline in bond underwriting as the still troubled credit markets limited the amount that companies could borrow to complete deals. The investment banking business would have fared even worse were it not for strong stock underwriting activity. As the stock market has rebounded, Goldman
was able to leverage its strong reputation to help companies issue new shares to take advantage of the rising market.
Lloyd Blankfein, the company's chairman and CEO, said Goldman is starting to see a rebound across many of its businesses even as the broader economy and consumers continue to struggle with rising unemployment and mounting loan losses.
"Although the world continues to face serious economic challenges, we are seeing improving conditions and evidence of stabilization, even growth, across a number of sectors," Blankfein said in a statement.
Goldman, which has outperformed other financial companies for years, has been the strongest bank throughout the financial crisis. It had less exposure to toxic mortgage-backed securities than other companies and also has been more aggressive in its trading.
As an investment bank, its exposure to traditional consumer loans, like mortgages and credit cards, that have plagued traditional banks like Citigroup Inc. and Bank of America Corp., is limited.
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Reader Comments (Page 1 of 2)
10-15-2009 @ 9:08AM
joe said...
yeah they made a profit cause there always right every time BUNCH OF CROOKS
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10-15-2009 @ 9:13AM
Jim said...
And how many former Goldman-Sach Group partners are in key positions in the Obama Administration? How many "special deals" have been given exclusively to Goldman-Sach? How many conflict-of-interest rules have been suspended only for Goldman-Sach? Pay attention voters this is a huge conspiracy!
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10-15-2009 @ 2:44PM
repukeslie7 said...
The shrub's Secretary of the Treasury, Paulson, was an ex-Goldman Sach's executive. There were 8 other members of the that administration from Goldman Sach's. Others left that administration and went to work for Goldman Sach's. I just hope that with all their new found wealth that they are paying back the money that the shrub gave them.
10-15-2009 @ 9:31AM
peter said...
how??
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10-15-2009 @ 9:39AM
US said...
Sure....those are OUR dollars that they are calling THEIR profits. BULLCRAP
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10-15-2009 @ 2:09PM
JWR said...
Meanwhile foreclosures are 23 percent higher in the third quarter from 2008 or 900,000 properties. This is 5 percent higher than the second quarter of THIS year. According to RealtyTrac, this breaks ALL records since beginning reports in 2005. But, hey, we are coming OUT of the recession right? BS!
10-15-2009 @ 9:54AM
John George said...
Wow! The futures so bright we'll have to wear shades! Since we're all doing so well, let's shoot gasoline prices up to $100.00 a barrel while we're at it; so what if it causes a double dip depression worldwide! There will always be another bail out, right?
Over $140,000,000,000.00 in Wall Street bonuses to be paid this year; meanwhile, no jobs, no healthcare, no Social Security Cola and nearly 1,000,000 home foreclosures in September.
We need a viable and progressive Third Party Candidate and a grassroots campaign to vote out every incumbent politician up for reelection locally, statewide and nationally, regardless of whatever phony party affiliation they may claim.
Throw All The Bums Out!
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10-15-2009 @ 10:00AM
vbookish7 said...
I THINK I'LL TAK E OUT A LARGE LOAN FROM THEM AND NOT PAY IT BACK.
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10-15-2009 @ 10:13AM
Chris said...
At who's expense are these crooks making a profit. I am sick of my goverment(we the people) helping to rid the middle class.
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10-15-2009 @ 10:25AM
gere said...
That this administration even can get up in the morning and look itself in the mirror is preposterous! And the media trumpeting these huge tax money induced profit margins off the backs of the US taxpayer, and calling it an economic rebound is a sham. That these greedy banks and investment giants are currently allowed to impliment severe increases to access and ATM fees to our own money to gleen these profits is criminal. Obama is using my grandkids future to continue this next years round of overblown executive bonus payouts. His pals at Sachs Goldman, Chase, Bank of America and Wells Fargo cronies are raping all of us with the tacitapprovel of their old boss Geitner and then being allowed to run the very system they all had a hand in manipulating that destroyed our economy. So far, nobody that's been appointed to the US Treasury by the Obama administration, can explain why it is that criminal indictments have not been prepared for a lot of the fat cat lenders and oversight and review loan inspectors that orchestrated the sub prime mortgage fiasco in the first place? It was only possible to have occured because of their consistent lies and deciet across the board. No one can explain why specific language was not included in the bailout terms that precluded any bonuses what so ever from being paid out, until the taxpayers got paid back with interest, and that truly earned profits were in evidence? When is someone from the banking and mortgage sector gonna go to jail for all the fraud we the people are suffering the consequences over? When are the people gonna rise up and stop this nonsense once and for all? If your a lemming that believes these rosy lies still, do us all a favor, and jump off the cliff so that the sane ones who aren't still swilling the koolaid can gain back control of our futures.
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10-15-2009 @ 3:27PM
paulz said...
wait a minute the righties have been calling Obama a socialist, this is not the results of a socialist regime, I guess the Rightwing was wrong, Obama is 100% capatalist, so the Glen Beckers should at least be relieved by this news
10-15-2009 @ 10:38AM
dang1067 said...
The CFTC and Goldman Sachs are having an INSIDE JOB... There's gotta be a colossal corruption SCAMS of proportion going on between the two... Scamming BILLIONS upon BILLIONS in very short period of time... BILLIONS upon BILLIONS seems to keep flowing directly to Goldman Sachs on the pipelines of Wall Street... Fire the CFTC and audit Goldman Sachs thoroughly...
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10-15-2009 @ 11:36AM
DP said...
We need to publicly organize ourselves and fight this crap to get anywhere soon. we need to unite and do it now.
10-15-2009 @ 11:03AM
DP said...
This is nothing more thing criminal and we the american people let this keep happening every day and do nothing to spot this. Why do we watch this happen and do nothing? Are we stupid or just to lazy to orginize a public protest! It time to stand up for ourselves and get together and orginize our beleafs and stop this bull crap. I welcome all trillon responces.
DP
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10-15-2009 @ 11:46AM
Dave said...
Instead of all these Wall Street guys getting their big bonus they should be made to put the money in a trust so when the next crash comes from the shady deals they set up they can use the trust money to bail themselves out and not have to use our tax money to do so. How do we get this done?
10-15-2009 @ 11:07AM
Andy said...
These crooks should be in jail with madoff. It just goes to who really runs this country. THE BANKERS.
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10-15-2009 @ 11:17AM
Dianne said...
I find the profit at Goldman to be obscene and disgusting. I have been unemployed for a year and a half, and can't get find a job making $10/hr. Greed and corruption continue to prevail in the our Country, citizens left behind destitute and miserable, and the big cats laughing all the way to the bank. This is good news for whom?
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10-15-2009 @ 11:35AM
Doug said...
Once they have paid us, the taxpayers, back then they can call it profit. They sound like politicians, who if they don't spend all they budgeted, it's a surplus. Why did they pay off the trade deficit? Someone needs to teach Goldman Sachs and political types about little t accounts.
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10-15-2009 @ 12:16PM
michael said...
People...wake up!!! This economy is like a fire sale...people are getting all they can carry out and once it is all gone...we the general public will be left with nothing but debt and a ruined economy...
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10-15-2009 @ 11:49AM
sonigblue said...
Ill-gotten gains-bunch of THIEVES.[and I am a Republican]
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