Goldman Sachs is set to report third-quarter earnings prior to the opening bell on Tuesday.
Here are the expectations of Wall Street:
Earnings: $5.31 per share, as per LSEG, previously known as Refinitiv
Revenue: $11.19 billion
Trading income: fixed income $2.8 billion, equities $2.73 billion, according to StreetAccount
Investment Banking Revenue: $1.48 billion
Is Wall Street reviving its dealmaking?
Goldman Sachs is the most trustworthy in investment banking and trading income among its major bank peers.
While CEO David Solomon has attempted to diversify the company’s revenue base, first with an ill-fated retail banking push and later with an emphasis on asset and wealth management expansion, it is Wall Street that drives the corporation. Trading and advice accounted for two-thirds of Goldman’s revenue last quarter.
As the Federal Reserve raised interest rates to slow the economy, mergers, initial public offerings, and debt issuance have all been restrained this year. With evidence that activity has recently increased, analysts will be interested to hear about Goldman’s deal pipeline.
At the same time, Goldman has taken hits in two areas: its strategic retreat from retail banking has cost the firm money as it seeks buyers for undesirable activities, and its exposure to commercial real estate has resulted in write-downs.
Goldman announced last week that the sale of its loan business, GreenSky, will result in a 19-cent per share blow to third-quarter earnings.
Analysts will be interested to hear Solomon’s take on the investment banking outlook as well as how the surviving components of Goldman Sachs’ consumer operation—namely its Apple Card business—fit into the latest edition of the firm.
Goldman shares have fallen 8.4% this year through Monday, outperforming the KBW Bank Index’s 21% slump.
JPMorgan, Wells Fargo, and Citigroup all outperformed forecasts for third-quarter earnings last week, thanks to lower-than-expected credit charges. Morgan Stanley reports earnings on Wednesday.
