Goldman Sachs misses Q3 earnings expectations

The Goldman Sachs Group Inc. (NYSE: GS) reported better-than-expected revenues for the third quarter of 2019 while earnings missed forecasts. Shares were down 1.9% in premarket hours on Tuesday. The consensus estimate was for earnings of $4.81 per share on revenue of $8.31 billion.

Total revenues of $8.32 billion fell 6% year-over-year due to lower revenues in Investing & Lending and Investment Banking.

Net earnings applicable to common shareholders decreased 27% year-over-year to $1.79 billion while EPS fell 24% to $4.79.

Book value per common share was $218.82, 10.9% higher compared to the end of Q3 2018. Provision for credit losses rose 67% to $291 million from last year, mainly due to higher impairments.

Net revenues in Investment Banking fell 15% year-over-year to $1.69 billion, hurt by declines in Financial Advisory and Underwriting. Revenues in Financial Advisory dropped 22% due to a decrease in M&A transactions. Declines in IPOs and leveraged finance transactions hurt underwriting revenues during the quarter.

Revenues in Institutional Client Services rose 6% year-over-year to $3.29 billion, helped by growth in FICC and Equities. Strength in commodities and credit products coupled with higher commissions and fees helped drive revenue growth in FICC and Equities.

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Investing & Lending revenues fell 17% year-over-year to $1.68 billion, hurt by a 40% drop in equity securities revenues. Revenues in debt securities and loans rose 10% from last year. Investment Management revenues dipped 2% to $1.67 billion, due to lower incentive fees.   

On October 14, 2019, the Board of Directors declared a dividend of $1.25 per common share, payable on December 30, 2019 to common shareholders of record on December 2, 2019.

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