Goldman Sachs Group Inc (NYSE:GS) released its earnings numbers for the third quarter of 2013 this morning before the market opened. The company showed earnings of $2.88 per share for the three months period on revenue totaling $6.72 billion. On this morning’s pre-market shares in the investment bank fell by more than 3%, indicating the fall in revenue was extremely significant to investors.
Analysts following the investment bank leading up to the announcement of these numbers were looking for EPS of around $2.45 by consensus. Revenue for the same period was expected to come in at $7.3 billion. In the same three months of last year Goldman Sachs Group Inc (NYSE:GS) earned $2.85 per share on revenue of $8.4 billion.
When portfolio managers get started in the business, their investing style often changes over the years. However, when Will Nasgovitz bought his first stock when he was 12, he was already zeroing in on value investing, and he didn't even know it. Nasgovitz has been with mutual fund manager Heartland Advisors for almost 20 years, Read More
One of the biggest culprits being blamed for the problems at Goldman Sachs Group Inc (NYSE:GS) is trading income. Trading income was down at several of the big banks that have already made their third quarter numbers public, but Goldman Sachs lost an significant amount of business in the area.
Revenue in bond trading fell by around 44% from last year according to the earnings report. Equity trading revenue was down 18% and investment banking advisory revenue dropped 17%. Goldman Sachs Group Inc (NYSE:GS) will have flat revenues for the next two years according to analyst consensus. Whether the firm can turn that into higher EPS, as they did in this report, is difficult to predict.
Goldman Sachs Group Inc (NYSE:GS) shares have risen in value by more than 22% so far in 2013. Those numbers put the firm a little bit ahead of the S&P 500, but not by a significant margin. Goldman prospects depend on the appetites of traders. If economic instability persists the company will not be able to attract more trading revenue and these numbers will stay depressed.
Goldman executives will host an earnings call at 12 PM EST in order to discuss this morning’s earnings release.