Here are the numbers:
- Earnings: $14.93 per share versus $10.18 consensus estimate, according to Refinitiv
- Revenue: $13.61 billion versus $11.68 billion consensus estimate
The bank’s earnings rose 63% to $5.28 billion, or $14.93 a share, as revenue jumped 26% to $13.61 billion. Shares of the New York-based bank rose 2.4 percent.
Goldman — led by CEO David Solomon — has the world’s number one investment banking franchise, and analysts have predicted strong returns from booming mergers and IPO activity in the first quarter. This topic has surfaced in Wall Street competitors from JPMorgan Chase to Morgan Stanley.
But Goldman beat expectations, generating $3.7 billion in investment banking revenue. This is an 88% increase over the previous year and about $750 million more than the StreetAccount estimate. These results were driven by a rise in completed merger transactions and underwriting of debt and equity. The bank said advisory revenue hit a record high.
Revenue in the bank’s Markets division rose 23% to $5.61 billion, as the expected slowdown in bond trading was offset by a rise in financing results.
Bond trading returns of $2 billion exceeded StreetAccount’s estimate of $1.97 billion, while stock trading of $1.92 billion missed the estimate of $2.08 billion. Equity financing revenue more than doubled year-over-year to $1.18 billion, and fixed income financing rose 55% to $513 million.
Meanwhile, Goldman’s consumer business reported gains from rising stock market values and increased credit card balances and deposits. The company’s consumer and wealth management division saw revenue increase 35% to $2.02 billion, topping the $1.79 billion estimate.
“Goldman Sachs simply crushed third-quarter earnings,” said Dave Donovan, executive vice president of financial services at Publicis Sapient. “As other major banks released loan loss reserves to boost third-quarter numbers, Goldman’s strategy has served to grow the business.”
Analysts are likely to ask Solomon about the rationale for his $2.24 billion acquisition of fintech lender GreenSky. The deal is expected to close by the first quarter of 2022.
The bank said last month that Chief Financial Officer Stephen Scheer would step down by the end of the year to be replaced by Dennis Coleman, the current co-chair of the company’s global finance group.
Goldman shares are up 47% this year through Friday, outpacing the 37% rise of the KBW Bank Index.
Goldman is the last of the six largest US banks to report earnings. JPMorgan, Bank of America, Morgan Stanley, Citigroup and Wells Fargo all beat earnings and revenue expectations, buoyed by reserve issuances and strong investment banking returns.
This story is developing. . Please check back for updates
Get stock picks, analyst calls, exclusive interviews, and access to CNBC TV.
Sign up to start Free trial today.