Goldman’s Q3 Profit Beats Estimates; Shares Marginally Higher (GS)

Wall Street giant Goldman Sachs Group Inc. (NYSE: GS) today reported its third-quarter financial results, posting better-than-expected earnings. Goldman’s third-quarter revenue more than doubled, driven by investment gains. The company also raised its quarterly dividend.

For the third quarter ended September 30, 2012, GS reported a profit of $1.5 billion, or $2.85 per share, compared to a loss of $428 million, or $0.84 per share reported for the same period in the previous year. Analysts surveyed by Thomson Reuters were expecting the bank to report earnings of $2.12 per share for the quarter.

Goldman reported third-quarter net revenue of $8.35 billion, compared to $3.6 billion reported for the same period in the previous year.

The sharp increase in revenue was driven by GS’s investing and lending division. The division generated $1.8 billion in revenue in the third quarter. Last year, the division reduced GS’s total revenue by $2.5 billion.

Goldman’s investment banking division generated net revenue of $1.16 billion for the third quarter of 2012, representing an increase of 49% over the same period in the previous year. Within the investment banking division, GS’s financial advisory business generated net revenue of $509 million, while the underwriting business generated net revenue of $655 million.

The bank’s institutional client services division generated revenue of $4.18 billion for the third quarter, representing an increase of 3% over the same period in the previous year. Net revenue in the Fixed Income, Currency and Commodities (FICC) division was $2.22 billion, representing an increase 28% over the same period in the previous year.

Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs, said that GS’s third-quarter performance was generally solid in the context of a still challenging economic environment.

GS also raised its quarterly cash dividend to $0.50 per share from $0.46 per share. The dividend will be payable on December 28, 2012 to common shareholders of record on November 30, 2012.

GS shares have edged higher following the release of third-quarter results. At last check, the stock was trading 0.27% higher at $124.84 on volume of 2.82 million. The stock hit an intra-day high of $125.75.

GS shares have gained more than 38% so far this year.