Goldman Sachs (NYSE: GS) announced Thursday that fiscal third quarter profits more than tripled to $3.03 billion as strong results from its trading division helped pad the bottom line.
Earnings for the third quarter easily topped analyst estimates of $4.24 a share, as the result works out to $5.25 per share. The result easily surpassed last year’s profits of $810 million, or $1.81 per share.
Revenues were strong as well, totaling $12.37 billion for the quarter as the firm’s trading and principal investments unit led the way. That division, which saw strong bond trading profits, posted $10.03 billion in revenue for the third quarter.
“Our client franchise business – advisory, financing, market making and asset management – contribute to and benefit from the overall improvement in conditions,” added Blankfein.
Though Goldman saw strong results in its trading unit, its investment banking business, a mainstay for the firm, saw a pullback in business. Underwriting net revenues slipped 31 percent in the period to $899 million.
Goldman’s asset management business also saw a decline, with net revenues dipping 29 percent to $1.45 billion.
The bank, which has been one of the more solid financial institutions in regard to liquidity, said Tier 1 common ratio reached 11.6 percent as of September 25, 2009, up from 10.9 percent on June 26, 2009.
The company set aside another $5.4 billion for compensation in the third quarter, raising its total to $16.8 billion for the year.
Compensation, which has been a hot topic in recent days with Obama’s Pay Czar asking AIG not to pay full retention bonuses, does not seem to be of concern to Goldman. The bank stated that it does not offer multi-year bonus guarantees, which are the ones mainly under scrutiny at AIG.
Shares of Goldman Sachs opened the trading day 2 percent lower at $188.62.
