Goldman Sachs Group Inc. said Tuesday that its third-quarter profit rose from a year ago as the Wall Street firm cut costs and reaped the benefit of last year’s tax cut.
Goldman’s profit of $2.52 billion, on revenue of $8.65 billion, was higher than a year ago.
Earnings per share were $6.28. That was above the expectations of analysts polled by Refinitiv, who predicted $5.38 a share.
The third quarter, with its August lull in trading and corporate securities issuance, is typically a slower one for Wall Street firms. Goldman lacks the big lending and consumer businesses that buoyed earnings at rivals including JPMorgan Chase & Co. last week.
The quarterly results are the last of Lloyd Blankfein’s tenure, which began in 2006 and ended Oct. 1, when David Solomon took over as Goldman’s CEO. He inherits a firm that must find new ways to grow, as technological, market and competitive forces threaten its core businesses of securities trading and investment banking.
To compensate, Goldman is getting into consumer banking and expanding its asset-management arm. Both businesses have the potential to generate steadier fees than the outsized returns — and losses — that can come from its Wall Street operations.
Investors and analysts will be looking for more detailed disclosures about a $5 billion revenue-growth initiative unveiled a year ago that relies on contributions across the firm.
Wall Street will also be watching to see if Mr. Solomon makes an appearance on Tuesday morning’s earnings call, a task Mr. Blankfein left to his chief financial officers.
But turnover in that seat, too — Mr. Solomon, in one of his first moves, is replacing CFO Martin Chavez with longtime investment banker Stephen Scherr, effective Nov. 4 — offers Goldman a chance to rethink tradition and put on a new face for investors frustrated by the stock’s steady slide in recent months. Goldman’s share price is down more than 15% this year, the worst among large banks except Morgan Stanley.
Write to Liz Hoffman at liz.hoffman@wsj.com
Source : MTV
