Goldman Sachs (GS) said Tuesday that its third-quarter profits rose 29% from a year earlier, as its Wall Street trading and trading businesses continued to deliver strong results despite a slowdown after a record second quarter.
The bank reported net income of $5.29 billion, or $17.01 per share, well above the $13.50 per share expected by analysts.
Total net income rose 23% to $18.7 billion compared to analysts’ expectations of $16.4 billion.
Goldman Sachs CEO David Solomon described the bank’s third-quarter backdrop as “a complicated operating environment” in a statement accompanying the earnings release.
“Despite the world’s current complexity and uncertainty, we remain very well positioned to continue to meet our customers’ expectations,” Solomon said.
Shares of Goldman Sachs rose 3% in premarket trading.
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Goldman’s results come after Wall Street executives warned that the trading boom that generated record revenues earlier this year would be difficult to sustain.
The company said revenue from its equity and fixed-income trading divisions totaled $9.9 billion, driven by a 96% increase in revenue from its equity finance business.
The total was well above the $8.8 billion forecast by analysts, although it was still short of the record $12 billion the bank earned in the previous quarter. Revenue in Goldman’s fixed income, currencies and commodities group fell slightly from a year earlier.
Investment banking fees rose 21% over the same period to $3.22 billion, driven by higher revenue from its M&A advisory unit and its equity underwriting business. The council’s revenue reached a record $1.65 billion.
The results come as the nation’s biggest banks enter a somewhat tricky earnings season, with investors watching for signs that higher borrowing costs could temper the extraordinary growth recorded on Wall Street earlier in the year.
Goldman’s third-quarter report also included charitable contributions that reduced earnings by about $1 per share as well as higher-than-expected provisions for credit losses of $368 million, largely reflecting writedowns on wholesale loans.
The bank also reported reductions related to its Apple Card loan portfolio, contributing to a 72% drop in revenue at its Platform Solutions business. Goldman is handing over its Apple credit card portfolio to JPMorgan Chase.
Earlier Tuesday, JPMorgan Chase (JPM) reported weaker than expected profits in the latest quarter.
David Hollerith covers a range of developments across the financial industry, from Wall Street to banking and asset management to crypto and fintech. Email him at david.hollerith@yahoofinance.com. Follow him on X at @DsHollers.
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