-=Goldman Sachs (GS) reported earnings on Tue 17 Oct 2017 (b/o)

Goldman Sachs beats by $0.86, beats on revs

• Reports Q3 (Sep) earnings of $5.02 per share, $0.86 better than the Capital IQ Consensus of $4.16; revenues rose 2.0% year/year to $8.33 bln vs the $7.59 bln Capital IQ Consensus.
  • Annualized return on average common shareholders' equity (ROE) was 10.9% for the third quarter of 2017;
• Investment Banking
  • Net revenues in Investment Banking were $1.80 billion for the third quarter of 2017, 17% higher than the third quarter of 2016 and 4% higher than the second quarter of 2017.
  • Net revenues in Financial Advisory were $911 million, 38% higher than the third quarter of 2016, reflecting an increase in completed mergers and acquisitions.
  • Net revenues in Underwriting were $886 million, essentially unchanged compared with the third quarter of 2016, as slightly higher net revenues in debt underwriting, reflecting higher net revenues from investment-grade activity, were largely offset by lower net revenues in equity underwriting, reflecting a decrease in industry-wide offerings.
• Institutional Client Services
  • Net revenues in Institutional Client Services were $3.12 billion for the third quarter of 2017, 17% lower than the third quarter of 2016 and 2% higher than the second quarter of 2017.
  • Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.45 billion for the third quarter of 2017, 26% lower than the third quarter of 2016, due to significantly lower net revenues in commodities, interest rate products and credit products and lower net revenues in currencies, partially offset by higher net revenues in mortgages.
  • Net revenues in Equities were $1.67 billion for the third quarter of 2017, 7% lower than the third quarter of 2016, primarily due to lower net revenues in equities client execution, reflecting significantly lower results in derivatives, partially offset by higher results in cash products.
• Investing & Lending
  • Net revenues in Investing & Lending were $1.88 billion for the third quarter of 2017, 35% higher than the third quarter of 2016 and 19% higher than the second quarter of 2017.
• Expenses
  • Operating expenses were $5.35 billion for the third quarter of 2017, essentially unchanged compared with both the third quarter of 2016 and the second quarter of 2017.
• Book value per common share was $190.73 and tangible book value per common share was $180.42, both based on basic shares of 393.7 million as of September 30, 2017.