Goldman Sachs
This isn't too surprising given the major volatility in the bond market as prices trended lower amid the Fed hiking rates. Also not surprising was the sharp decline in all sorts of financial activity like M&A or investment banking.
Overall, Goldman Sachs is down 15% YTD which is better than the S&P 500
Inside the Numbers
In Q3, Goldman Sachs reported $8.25 per share in earnings which topped expectations of $7.69 per share. Revenue also beat at $12.0 billion vs expectations of $11.4 billion. Overall, earnings were down by about 43% compared to last year, while revenue was down by 12%.
The company attributed the earnings beat to better-than-expected performance from bond trading, while it sees the shortfall in M&A activity and IPOs as the major factor behind its decline in revenue.
The company is also embarking on a reorganization of its business. It sees the reorg as unlocking more shareholder value, returns, and a better alignment with the changing business environment. It will combine the bank's four divisions into 3 - Asset & Wealth Management, Global Banking & Markets, and Platform Solutions. The biggest change is to split its consumer business in 2, and no longer separately report these results.
Goldman's fixed income division contributed $3.5 billion, a 41% increase from last year and well above expectations of $3 billion. Traders were able to take advantage of the bond market volatility as short-term rates trended higher, while longer-term rates fluctuated in a wide range. The weakness in bonds also led to increased trading volumes.
Equities accounted for $2.7 billion in revenue, a 14% decline but better than expectations of $2.6 billion. However, IB revenue was down 57% at $1.6 billion, below estimates of $1.8 billion. Asset management revenue also declined by 20% to $1.8 billion, mainly due to writedowns of stakes of private companies.