Goldman Sachs beats by $1.36, beats on revs
Reports Q3 (Sep) earnings of $4.57 per share, $1.36 better than the Capital IQ Consensus Estimate of $3.21; revenues rose 24.8% year/year to $8.39 bln vs the $7.8 bln consensus.
- Net revenues in Investment Banking were $1.46 billion for the third quarter of 2014, 26% higher than the third quarter of 2013 and 18% lower than the second quarter of 2014.
- Net revenues in Financial Advisory were $594 million, 40% higher than the third quarter of 2013, reflecting an increase in industry-wide completed mergers and acquisitions.
- Net revenues in Underwriting were $870 million, 17% higher than the third quarter of 2013, due to significantly higher net revenues in equity underwriting, principally from initial public offerings. This increase was partially offset by slightly lower net revenues in debt underwriting.
- Net revenues in Institutional Client Services were $3.77 billion for the third quarter of 2014, 32% higher than the third quarter of 2013 and 2% lower than the second quarter of 2014.
- Net revenues in Fixed Income, Currency and Commodities Client Execution were $2.17 billion, including a gain of $157 million related to the extinguishment of certain of the firm's junior subordinated debt, and were 74% higher than a challenging third quarter of 2013.
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- During the quarter, Fixed Income, Currency and Commodities Client Execution continued to operate in an environment characterized by generally low levels of activity, although during the latter part of the quarter, market-making conditions were generally more favorable. Commissions and fees were slightly higher compared with the third quarter of 2013.
- During the quarter, Equities operated in an environment characterized by continued low volatility levels and generally lower market volumes in the United States and Europe compared with the second quarter of 2014.
- Net revenues in Investing & Lending were $1.69 billion for the third quarter of 2014, 15% higher than the third quarter of 2013 and 18% lower than the second quarter of 2014. Net revenues in Investment Management were $1.46 billion for the third quarter of 2014, 20% higher than the third quarter of 2013 and essentially unchanged compared with the second quarter of 2014.
- The ratio of compensation and benefits to net revenues for the first nine months of 2014 was 40.0%, compared with 43.0% for the first half of 2014 and 41.0% for the first nine months of 2013.
- Book value per common share was $161.38 and tangible book value per common share was $151.70
- On October 15, 2014, the Board of Directors of The Goldman Sachs Group, Inc. increased the firm's quarterly dividend to $0.60 per common share from $0.55 per common share.
- The firm's Common Equity Tier 1 ratio was 11.8%