Goldman Sachs Releases Third-Quarter Results
Goldman Sachs Releases
Third-Quarter Results
Goldman Sachs posted third-quarter results on Tuesday, reporting a 40 percent decline in profits. From June to September the investment bank earned $1.9 billion, or $2.98 per share. Revenues fell 28 percent from 2009's third quarter to $8.9 billion.
Analysts responding to a recent Thomson Financial survey had projected earnings of $2.28 per share for the firm, which had reported earnings of $5.25 per share for the same period a year ago. As recently as July, analysts were estimating the banks' third quarter earnings to come in at around $4.00 per share, but trading volume on US stock exchanges tumbled during the quarter, dropping 26 percent, which deprived the nation's big banks of a significant amount of commission revenue.
As a result of the dropoff in trading volume, revenue for Goldman Sachs' trading and principal investment division fell 36 percent from last year's $8.8 billion in the third quarter to $6.4 billion.
The numbers mean lower pay for the bank's well paid employees, as the firm set aside $3.8 billion for compensation and benefits in the latest quarter. This brings their per-employee payout so far this year to about $370,000, down 30 percent from the same figure in 2009.
Tuesday's report comes when investors are becoming wary of the nation's big banks in light of impending financial reform legislation, higher capital rules, and legal concerns faced by large lenders. Bank of America on Tuesday issued a statement declaring that reforms in financing legislation would cost the firm an estimated $10 billion.
Shares of Goldman Sachs fell 1 percent in pre-market trading to $152.31.
Goldman Sachs posted third-quarter results on Tuesday, reporting a 40 percent decline in profits. From June to September the investment bank earned $1.9 billion, or $2.98 per share. Revenues fell 28 percent from 2009's third quarter to $8.9 billion.
Analysts responding to a recent Thomson Financial survey had projected earnings of $2.28 per share for the firm, which had reported earnings of $5.25 per share for the same period a year ago. As recently as July, analysts were estimating the banks' third quarter earnings to come in at around $4.00 per share, but trading volume on US stock exchanges tumbled during the quarter, dropping 26 percent, which deprived the nation's big banks of a significant amount of commission revenue.
As a result of the dropoff in trading volume, revenue for Goldman Sachs' trading and principal investment division fell 36 percent from last year's $8.8 billion in the third quarter to $6.4 billion.
The numbers mean lower pay for the bank's well paid employees, as the firm set aside $3.8 billion for compensation and benefits in the latest quarter. This brings their per-employee payout so far this year to about $370,000, down 30 percent from the same figure in 2009.
Tuesday's report comes when investors are becoming wary of the nation's big banks in light of impending financial reform legislation, higher capital rules, and legal concerns faced by large lenders. Bank of America on Tuesday issued a statement declaring that reforms in financing legislation would cost the firm an estimated $10 billion.
Shares of Goldman Sachs fell 1 percent in pre-market trading to $152.31.
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