NEW YORK - Goldman Sachs Group Inc.'s third-quarter earnings declined a less-than-feared 40% as the giant investment bank's revenue fell 27%.
Investment banking results helped make up for weaker trading, though trading still carried the quarter, contributing 71% of the firm's overall net revenues.
Shares rose 0.78% in recent premarket action to $154.90. As of Monday's close, the stock had fallen 17% in the past year.
The results blew past analyst expectations, but Goldman followed the same pattern as other large banks. Revenues and profits are down from last year amid ongoing economic uncertainty and a pull back in trading and other previously big revenue generators. Goldman's third quarter profits were $1.9 billion, or $2.98 a share, down from $3.19 billion, or $5.25 a share last year. Net revenues were $8.9 billion.
Analysts polled by Thomson Reuters had only expected profits of $2.32 per share on revenues of $7.92 billion.
Investment banking revenues rose 24%, to $1.1 billion, from the prior year's third quarter on a 40% increase in revenues from equity and bond underwriting. Trading revenues fell 36% from last year, to $6.4 billion. Equities trading fell 43% in the quarter, to $1 billion, despite the surge in the stock markets in September. Revenues from trading fixed income, commodities and currencies fell 37% from the prior year, to $3.77 billion.
Goldman has been trying to rehabilitate its image. In the second quarter it paid $550 million to settle civil charges with the Securities and Exchange Commission it misled customers by selling them mortgage-backed securities without disclosing the role of a hedge fund that was seeking to bet against those securities.
Chairman and Chief Executive Lloyd C. Blankfein said in a statement Tuesday that the latest results reflect solid performances across its businesses, though he noted that economic conditions remain challenging in several important markets.
Goldman saw a surge in trading activity in September, but trading has broadly been down recently, pressuring revenues across Wall Street.
Goldman said in a statement that it had significantly lower results in each of its fixed income, currency and commodity businesses, particularly interest rate trading and credit products. Equity trading results fell because of a pull back in client activity and lower market volumes, the firm said.
The amount of money Goldman's traders had at risk during the quarter dropped to $121 million from $136 million in the second quarter and $208 million in the third quarter last year.
The company had posted strong profits in recent quarters, although its second-quarter bottom line was clobbered by turbulent markets and the charges to settle the government's civil-fraud complaint.