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Goldman Sachs’s (NYSE:GS) Q3 revenue beat the average analyst estimate due to the strong performance of its Assets & Wealth Management business. Earnings were again marred by writedowns as part of Goldman’s plan to reduce principal investments within its Asset & Wealth Management business and exit parts of the consumer finance sector.
Q3 GAAP EPS of $5.47 increased from $3.08 in Q2 2023 and dropped from $8.25 in Q3 2022. The current quarter may not be comparable with the consensus of $5.53. Excluding items totaling $2.41 per share related to its strategic plan, Q3 2023 EPS would have been $7.88.
The items affecting Q3 included a $728M charge on principal investments, a $203M charge on GreenSky, $37M loss on its Marcus loans portfolio, and $25M writedown on personal financial management business.
Total net revenue of $11.8B, topping the $11.1B average analyst estimate, rose from $10.9B in the previous quarter and slipped from $12.0B in the year-ago period.
Net revenues, compared with the third quarter of 2022, reflected lower net revenues in Asset & Wealth Management, offset by higher net revenues in Global Banking & Markets and Platform Solutions.
“We continue to make significant progress executing on our strategic priorities and we’re confident that the work we’re doing now provides us a much stronger platform for 2024,” said Chairman and CEO David Solomon. “I also expect a continued recovery in both capital markets and strategic activity if conditions remain conducive.”
Goldman (GS) stock rose 0.4% in Tuesday premarket trading.
Q3 net interest income of $1.55B, missing the $1.86B Bloomberg consensus, dropped from $1.68B in the prior quarter and $2.04B a year ago.
The provision for credit losses were $7M vs. $615M in Q2 and $515M in Q3 2022.
Loans of $178B at Sept. 30, 2023, unchanged vs. June 30, 2023; deposits grew to $403B from $399B at June 30.
Total operating expenses were $9.05B, up 6% Q/Q and 18% Y/Y.
Compensation and benefits expense of $4.19B climbed from $3.62B in the previous quarter and $3.61B a year ago.
Headcount rose to 45,900 from 44,600 in the previous quarter and dropped from 49,100 at Sept. 30, 2022.
Global Banking & Markets net revenue of $8.01B rose 11% Q/Q and 6% Y/Y. Investment banking fees of $1.55B increased 9% Q/Q and 1% Y/Y; FICC revenue of $3.38B jumped 25% Q/Q and dropped 6% Y/Y; Equities revenue of $2.96B was flat Q/Q and rose 8% Y/Y.
Asset & Wealth Management net revenue of $3.23B; management and other fees totaled $2.41B, up 2% Q/Q and 7% Y/Y.
Platform Solutions net revenue of $578M declined 12% Q/Q and rose 53% Y/Y.
Conference call at 9:30 AM ET.
Earlier, Goldman Sachs (GS) GAAP EPS of $5.47 misses by $0.56, revenue of $11.82B beats by $690M
