David Solomon, CEO of Goldman Sachs Group Inc., at the Goldman Sachs Financial Services Conference in New York, December 6, 2022.
Michael Nagle | Bloomberg | Getty Images
Goldman Sachs is expected to report third-quarter results before the opening bell on Tuesday.
Here’s what Wall Street expects:
- Earnings: $5.31 per share, according to LSEG, formerly known as Refinitiv
- Revenue: $11.19 billion
- Trading revenue: $2.8 billion in fixed income, $2.73 billion in equities, per StreetAccount
- Investment banking revenue: $1.48 billion
Are Wall Street business on the mend?
Of the major banks, Goldman Sachs relies most heavily on investment banking and trading revenue.
While the company under CEO David Solomon has made efforts to diversify its revenue streams, first through an ill-fated foray into retail banking and later by emphasizing growth in wealth and wealth management, it is Wall Street that is driving the company. Trading and consulting were eliminated in the last quarter two-thirds of Goldman’s sales.
That was a headwind as mergers, initial public offerings and debt issuances were all muted this year as the Federal Reserve raised interest rates to slow the economy. Given signs that activity has picked up recently, analysts will be eager to learn more about Goldman’s pipeline of deals.
At the same time, Goldman has suffered setbacks in two areas: its strategic move away from retail banking has left the company with losses as it finds buyers for undesirable businesses, and its involvement in commercial real estate has also led to write-downs.
Last week, Goldman said the sale of its GreenSky lending business would cause its third-quarter results to fall 19 cents per share.
Analysts will be interested to see how Solomon views the prospects for investment banking and how the remaining parts of his consumer efforts – most notably his Apple Card business – fit into the latest version of Goldman Sachs.
Goldman shares have fallen 8.4% this year through Monday, better than the KBW Bank Index’s 21% decline.
Last week, JPMorgan, Wells Fargo and Citigroup each beat third-quarter profit expectations, helped by better-than-expected credit costs. Morgan Stanley publishes results on Wednesday.
This story is developing. Please check back for updates.