Goldman Sachs earnings jump 60% in third-quarter

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Goldman Sachs earnings jump 60% in third-quarter

On Friday, Goldman Sachs Group Inc. said its third quarter earnings vaulted more than 60% with a big boost from its investment banking unit as the Dow component benefited from brisk capital raising and other deal making on Wall Street.

In another bright spot, the bank s global markets revenue turned in a particularly strong beat of analyst projections, and the banks assets under management had a fresh record.

The bank also predicted an increase in the likelihood of inflation policy tightening in the near term due to inflation pressures. Any rate hikes are seen as beneficial to lenders that have seen their loan margins pressured by low interest rates.

- David Solomon said the firm had consistently good operating performance and that its Opportunity Set continues to be attractive across all of our business segments. Goldman Sachs GS, shares rose 2.6% in Midday trades, enough to become the top performer among the Dow Jones Industrial Average s DJIA components.

CFRA analyst Ben Carson reiterated a strong buy rating on Goldman Sachs and raised his 12-month price target to $470 - shares from $445 - shares.

Best-in class, GS is executing on all cylinders with industry leading performance and gaining market share and growing assets under supervision, he said. Nonetheless, GS trades at significant discount to the S&P 500 or lead asset managers like Schwab SCHW and BlackRock BLK. The Wall Street giant said its net income rose to $5.28 billion, or $14.93 a share, from $3.23 billion, or $8.98 a share, in the year-ago period.

Net revenue increased to $13.6bn from $10.8bn. Net interest income climbed to $1.56 billion from $1.08 billion.

Goldman Sachs beat the consensus analyst estimates for earnings of $10.14 a share and revenue of $11.72 billion, according to a survey by FactSet.

Goldman's investment banking unit nearly doubled its income to $3.55 billion from $1.93 billion and ahead of the analyst estimate of $2.6 billion.

The firm s global revenue increased from $4.55 billion to $5.61 billion. The latest figure blew past the FactSet estimate of $3.70 billion.

During the third quarter of goldman services purchased $1.0 billion of stock. Its headcount at the end of the second quarter was 43,000, up 5.4% from the same period last year.

Its third quarter provision for credit losses of $175 million compared to $278 million a year ago.

Assets under supervision increased to $2.37 trillion during the quarter, a record. Firmwide management and other fees of $1.95 billion also set a new record.

Turning to M&A, Goldman acquired two businesses in the quarter: NN Investment Partners and GreenSky Inc. Both deals are expected to close by the end of the first quarter.

Goldman Sachs shares are up 48.3% this year, compared with an increase of 18.2% by the S&P 500 SPX and a rise of 38% by the KBW Bank Index BKX, also this year.