Investment Bank Goldman Sachs Reports $2.99 Billion in Profits

Investment bank giant Goldman Sachs reported a whopping $2.99 billion in Q3 profits – surpassing what analysts had expected, with revenue up 7% to $12.7 billion.

Not at all in disarray

CEO David M. Soloman had earlier suggested that areas of the bank were somewhat in disarray – confusing investors about its performance this quarter. According to Yahoo Finance, he had cautioned about a $400 million hit to pre-tax earnings from the consumer business and “trading revenue falling 10% from a year ago.”

However, looking at the company’s Q3 performance, the story is quite the opposite – reporting $12.7 bn in revenue.

Goldman’s reputation intact

According to Bloomberg, Evercore ISI analyst Glenn Schorr wrote in a note that Goldman Sachs had a strong Q3, exceeding expectations across the board. He also said that with favorable market conditions and rates expected to decline, investors are likely to continue seeing Goldman as a top choice for the improving economic environment.

Leaning into its strengths

David Solomon, Chairman and CEO of Goldman Sachs, said in a news release, “Our performance demonstrates the strength of our world-class franchise in an improving operating environment. We continue to lean into our strengths – exceptional talent, execution capabilities and risk management expertise – allowing us to effectively serve our clients against a complex backdrop and deliver for shareholders.”

What Solomon is basically saying is that the Goldman employees have been critical to the company’s success. It has been able to implement its strategies. And, most importantly perhaps, that the company’s ability to manage risk is what sets it apart. In a sector where risk is everything, that’s perhaps the most valuable asset it has to offer – avoiding big losses.

Opinion

The results from this quarter highlight the strength of Goldman in a volatile environment. Even though Solomon had made investors somewhat alarmed by his previous remarks, the Q3 results outperformed Wall Street expectations and demonstrated the bank’s ability to keep its core business incredibly strong – especially investment banking and asset management.

Ultimately, it reinforces the notion of Goldman as a leading financial powerhouse during times of uncertainty.

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Goldman Sachs Q3 2024 Data in a Nutshell:

Data source: Goldman Sachs Third Quarter 2024 Earnings Results [PDF]