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Oct 14, 2020

News | Business | Finance: Goldman Sachs wallops profit estimates on stronger-than-expected bond trading

 

Hugh Son


Goldman Sachs posted third-quarter results that crushed analysts’ profit estimates on stronger-than-expected results in bond trading and asset management.

The firm generated $3.62 billion in profit, or $9.68 a share, exceeding the $5.57 per share estimate of analysts surveyed by Refinitiv. Companywide revenue of $10.78 billion topped the estimate by more than $1 billion, driven by the trading and asset management divisions.

Shares of the bank climbed 3.1% in premarket trading.

Chief Executive Officer David Solomon just marked his second year atop Goldman Sachs, but he’s still putting his imprint on the firm. Last month, he restructured several of his businesses and named new heads for the New York-based bank’s asset management and consumer and wealth management divisions.

The 151-year-old investment bank is in the midst of a transformation, launching a slew of digital banking products in hopes of disrupting its established retail banking competitors.

It’s also pushing to get more revenue from wealth management, like rival Morgan Stanley, but hasn’t announced megadeals like the two major acquisitions Morgan Stanley disclosed this year.

Goldman shares have fallen 8.3% this year, a smaller decline than most big banks and the 31% drop of the KBW Bank Index.

On Tuesday, rivals JPMorgan Chase and Citigroup posted results that beat analysts’ expectations as both banks set aside less money for defaulting loans.

Here’s how the company did:

Earnings: $9.68 per share, vs. $5.57 expected by Refinitiv’s consensus estimates.

Revenue: $10.78 billion, vs. $9.46 billion expected by Refinitiv estimates. 

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