Goldman Sachs crushed analysts’ third-quarter estimates and posted strong results in its asset management and bond trading divisions.
Goldman exceeded the $5.57 share estimates and instead generated $9.68 per share or a $3.62 billion profit. Its companywide earnings fell $1 billion more than its estimate at $10.78 billion.
Once the bank posted its results on Wednesday, its shares rose by 2.2 percent during pre-market trading and 0.6 percent during regular trading hours.
Goldman Sachs CEO David Solomon said in a press release: “Our ability to serve clients who are navigating a very uncertain environment drove strong performance across the franchise, building off a strong first half of the year.” This is Solomon’s second year as Goldman’s CEO.
Goldman’s trading division saw a 29 percent increase from last year’s third quarter, resulting in $4.55 billion in revenue. Gains in bond trading followed with $2.5 billion in revenue, almost half a billion more than anticipated. Its equities trading saw revenue of $2.05 billion, which nearly matched analysts’ expectations. Meanwhile, Goldman’s asset management division had revenue of $2.77 billion, almost $900 million more than estimates. That figure marked a 71 percent increase from a year ago.
The bank said revenues were “significantly higher” in its equity, lending, and debt investments. Goldman holds a portfolio of private and public company stock in that division and higher levels in public shares were responsible for the gains.
The bank, headquartered in Lower Manhattan, is in the middle of a transformation, including launching digital products to get a foothold on its competition. The 151-year-old financial institution is also trying to drive more revenue from its wealth management division to compete with Morgan Stanley. However, Morgan Stanley’s major acquisitions from this year are making it hard for Goldman to compete. Overall, Goldman’s shares are 8.3 percent lower this year, and while down, the fall marks a smaller drop than many big banks have seen this year.