Goldman Sachs Reports Weakest Quarter in Nine Years
Saturday, September 20, 2008
Yesterday, Goldman Sachs reported its weakest quarter since the company went public in 1999, with net profit dropping 70 percent during its third quarter period. Even though its revenue fell below estimates, its third-quarter numbers were larger than analysts had expected, according to a report on Forbes.com. Goldman Sachs is now one of only two remaining independent investment banks on Wall Street, since the collapse of Lehman Brothers and Bank of America's acquisition of Merrill Lynch earlier this week.
The Goldman Sachs Group, Inc., headquartered in New York with financial centers around the world, recorded net revenues of $6.04 billion and net earnings of $845 million for the third quarter. Diluted earnings per common share were $1.81, compared to $6.13 for the third quarter of 2007 and $4.58 last quarter. The company's total assets as of August 29, 2008 equaled $1.08 trillion.
The company reported that net revenues in Fixed Income, Currency, and Commodities (FICC) were 67 percent lower than this time last year because of weak results from its credit products and mortgages. Residential mortgage loans and securities lost $500 million, while commercial mortgages resulted in a net loss of $325 million.
“This was a challenging quarter as we saw a marked decrease in client activity and declining asset valuations,” said Lloyd C. Blankfein, Goldman Sach's chairman and CEO. “Despite the deteriorating market conditions, the focus of our people, and strength and breadth of our client franchise produced a solid performance in a tough environment.”
“We remain well-positioned to meet the needs of our clients and identify and act on the right market opportunities,” Blankfein continued.
Additional business highlights reported by the company included:
- Goldman Sachs ranked first in worldwide announced and completed mergers and acquisitions, for the calendar year-to-date.
- The company's Securities Services produced its second best quarterly net revenues of $916 million, 20 percent higher than in the third quarter of 2007.
- Book value per common share increased two percent during the quarter to $99.30.
- The firm's Tier 1 SEC ratio, or capital divided by total risk-weighted assets, was 11.6 percent at the end of the quarter.
To view Goldman Sach's full earnings announcement, click here.
The Goldman Sachs Group, Inc., headquartered in New York with financial centers around the world, recorded net revenues of $6.04 billion and net earnings of $845 million for the third quarter. Diluted earnings per common share were $1.81, compared to $6.13 for the third quarter of 2007 and $4.58 last quarter. The company's total assets as of August 29, 2008 equaled $1.08 trillion.
The company reported that net revenues in Fixed Income, Currency, and Commodities (FICC) were 67 percent lower than this time last year because of weak results from its credit products and mortgages. Residential mortgage loans and securities lost $500 million, while commercial mortgages resulted in a net loss of $325 million.
“This was a challenging quarter as we saw a marked decrease in client activity and declining asset valuations,” said Lloyd C. Blankfein, Goldman Sach's chairman and CEO. “Despite the deteriorating market conditions, the focus of our people, and strength and breadth of our client franchise produced a solid performance in a tough environment.”
“We remain well-positioned to meet the needs of our clients and identify and act on the right market opportunities,” Blankfein continued.
Additional business highlights reported by the company included:
- Goldman Sachs ranked first in worldwide announced and completed mergers and acquisitions, for the calendar year-to-date.
- The company's Securities Services produced its second best quarterly net revenues of $916 million, 20 percent higher than in the third quarter of 2007.
- Book value per common share increased two percent during the quarter to $99.30.
- The firm's Tier 1 SEC ratio, or capital divided by total risk-weighted assets, was 11.6 percent at the end of the quarter.
To view Goldman Sach's full earnings announcement, click here.
