Goldman Sachs Group Inc (NYSE: GS) is trading up this morning after the bank reported market-beating results for its fiscal third quarter.
Highlights from CEO Solomon’s interview with CNBC
Also on Tuesday, the multinational confirmed plans to reorganise and said it will now operate under three business segments: Asset & Wealth Management, Global Banking & Markets, and Platform Solutions. On CNBC’s “Squawk Box”, CEO David Solomon said:
This reorganisation comes out of our one Goldman Sachs ethos to try to say how can we continue to position ourselves to serve our clients better.
Net interest income went up 30% this quarter as the U.S. Fed continued to lift rates, while revenue from investment banking crashed 57%, as per the earnings press release.
It’s a challenging operating environment for capital markets-centred firm. There hasn’t been a lot of capital markets activity given the economic headwinds.
Solomon warns of a recession as the U.S. Federal Reserve continues to tighten. Explaining what that means for investors, he said:
I think until we have a better trajectory on the direction of economic activity, it’s hard to really know where markets will settle. So, it’s time to be cautious.
Goldman Sachs Q3 earnings snapshot
Net income printed at $2.96 billion versus the year-ago $5.28 billion
Per-share earnings tanked significantly from $14.93 to $8.25
Revenue slipped 12% on a year-over-year basis to $11.98 billion
FactSet consensus was $7.75 of EPS on $11.42 billion in revenue
Management and other fees brought in $2.24 billion – up 15% YoY
Goldman Sachs stock is currently down 20% for the year. Still, CEO Solomon noted:
If you look at our market shares and our wallet shares, we’re really focused on our clients and we’re doing really well in servicing them.
Wall Street recommends that you buy Goldman Sachs stock and sees upside in it to $384 on average.
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