Goldman Tops Estimates, Announces Dividend Hike
Goldman Sachs reported quarterly earnings and revenue that beat analysts' expectations and the firm increased its dividend.
After the earnings announcement, Goldman's shares were volatile, most recently trading 0.4 percent higher. (Click here to get the latest quotes for Goldman Sachs.)
The company posted third-quarter earnings excluding items of $2.85 per share, shaarply up from a loss of 84 cents a share in the year-earlier period.
Goldman raised its dividend 8.7 percent, to $0.50 a share from $0.46.
Revenue surged to $8.35 billion from $3.59 billion a year ago, well above expectations.
Analysts had expected the company to report earnings excluding items of $2.12 a share on $7.30 billion in revenue, according to a consensus estimate from Thomson Reuters.
"This quarter's performance was generally solid in the context of a still challenging economic environment, " CEO Lloyd C. Blankfein said in a statement.
Chairman and Chief Executive Officer. Goldman is the fourth major bank to report earnings in what is forecast to be one of the worst quarterly seasons for companies since late 2009.
Net investment banking revenue jumped 49 percent to $1.16 billion from the same period in 2011 while revenues from financial advisory edged lower to $509 million. Underwriting income more than doubled to $655 million.
Trading in fixed income, currencies and commodities rose 28 percent to $2.22 billion on increased activity in mortgages, credit, currencies and interest-rate related products, while commodities fell.
The Wall Street investment bank said its Value-at-Risk (VaR) in commodities averaged $22 million per day in the three months to September, versus the $20 million averaged in the second quarter and the $25 million of 2011's third quarter.
VaR is an important consideration for investment banks when making trading and hedging decisions for an asset class.
In Goldman Sachs' case, its VaR readings are based on a 95 percent confidence level of the potential loss it could make in trading commodities and other assets over a one-day time horizon.
Net revenues in equities dropped 16 percent, which the company attributed to lower commissions and fees as well as the plunging market volume and net revenues in equities client execution.
So far, both Citigroup and JPMorgan Chase beat earnings and revenue forecasts, but Wells Fargo's light revenue disappointed investors.
—Reuters contributed to this report.