Goldman (GS) Posts Stunning Q3 Loss as Investment Banking Sinks, Revenue Halved
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Revenue Growth %: +24.6%
Financial Fact:
Total non-interest revenues: 9.17B
Today's EPS Names:
LBIX, ESEA, ISS, More
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Goldman Sachs (NYSE: GS) is getting clobbered Tuesday morning, following third-quarter results that delivered a massive miss on the top and bottom.
Revenue was halved from $7.281 billion to $3.587 billion, a far cry from the $4.59 billion expected.
Goldman reported a pre-tax loss of $730 million, but a $337 million tax benefit whittled that to a $393 million loss, or 84 cents per share. The Street was looking for a more modest loss of 15 cents per share.
Like its peers, Goldman took a big hit investment banking, revenues dropping 46 percent to $781 million. The top-line was also impacted by "other principal transactions," which amounted to $2.539 billion.
Net revenues in Institutional Client Services fell 13 percent to $4.06 billion.
Tier 1 capital ratio moved from 14.7 percent to 13.8 percent, and Tier 1 common ratio from 12.9 percent to 12.1 percent.
"CEO and investor confidence as well as asset prices across markets were lower in the third quarter given the uncertain macroeconomic and market conditions," commented CEO Lloyd Blankfein. "Our results were significantly impacted by the environment and we were disappointed to record a loss in the quarter."
Operating expenses in the quarter were $4.32 billion in the quarter, down 23% from last year. The accrual for compensation and benefits expenses was $1.58 billion, down 59%. Staff levels decreased 4% from the second quarter level. Non-compensation expenses were $2.74 billion, 21% higher than the third quarter of 2010 and 11% higher than the second quarter of 2011.
Goldman is down about 2 percent early Tuesday.
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Revenue was halved from $7.281 billion to $3.587 billion, a far cry from the $4.59 billion expected.
Goldman reported a pre-tax loss of $730 million, but a $337 million tax benefit whittled that to a $393 million loss, or 84 cents per share. The Street was looking for a more modest loss of 15 cents per share.
Like its peers, Goldman took a big hit investment banking, revenues dropping 46 percent to $781 million. The top-line was also impacted by "other principal transactions," which amounted to $2.539 billion.
Net revenues in Institutional Client Services fell 13 percent to $4.06 billion.
Tier 1 capital ratio moved from 14.7 percent to 13.8 percent, and Tier 1 common ratio from 12.9 percent to 12.1 percent.
"CEO and investor confidence as well as asset prices across markets were lower in the third quarter given the uncertain macroeconomic and market conditions," commented CEO Lloyd Blankfein. "Our results were significantly impacted by the environment and we were disappointed to record a loss in the quarter."
Operating expenses in the quarter were $4.32 billion in the quarter, down 23% from last year. The accrual for compensation and benefits expenses was $1.58 billion, down 59%. Staff levels decreased 4% from the second quarter level. Non-compensation expenses were $2.74 billion, 21% higher than the third quarter of 2010 and 11% higher than the second quarter of 2011.
Goldman is down about 2 percent early Tuesday.
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