10-QPeriod: Q3 FY2003

GOLDMAN SACHS GROUP INC Quarterly Report for Q3 Ended Aug 29, 2003

Filed October 10, 2003For Securities:GSGS-PAGS-PCGS-PDGSCE

Summary

Goldman Sachs Group, Inc. reported solid performance for the nine months ended August 29, 2003, with total revenues of $17.8 billion, largely flat compared to the prior year period. Net earnings saw a significant increase of 27% to $2.03 billion. This growth was driven by a substantial rebound in the Trading and Principal Investments segment, which saw revenues climb 36% to $5.77 billion, significantly outperforming the prior year. The Asset Management and Securities Services segment experienced a slight decline in net revenues, down 9% to $4.13 billion, impacted by lower commissions, though Asset Management revenues themselves grew. Investment Banking revenues decreased 11% due to a weaker M&A market. The balance sheet shows robust growth, with total assets increasing to $394.14 billion from $355.57 billion in the prior year. This growth is supported by an increase in shareholders' equity to $20.44 billion. The firm maintained strong liquidity with cash and cash equivalents at $6.64 billion. The company also highlighted its commitment to returning capital to shareholders, repurchasing approximately 10.9 million shares during the nine-month period.

Key Highlights

  • 1Net earnings increased by 27% year-over-year to $2.03 billion for the first nine months of fiscal 2003.
  • 2Total revenues remained stable at $17.8 billion, indicating resilience in a mixed economic environment.
  • 3The Trading and Principal Investments segment was the primary growth driver, with revenues up 36% to $5.77 billion.
  • 4Total assets grew to $394.14 billion, showcasing the firm's expanding financial footprint.
  • 5Shareholders' equity increased to $20.44 billion, strengthening the firm's capital base.
  • 6The firm repurchased approximately 10.9 million shares of common stock during the first nine months, signaling confidence and capital return.
  • 7The Investment Banking segment saw a 11% revenue decline, primarily due to continued weakness in the M&A market.

Frequently Asked Questions

For the nine months ended August 29, 2003, Goldman Sachs reported total revenues of $17.794 billion, which was largely flat compared to $17.806 billion in the same period last year. While overall revenues were stable, there were significant shifts between segments, with Trading and Principal Investments showing strong growth.

The significant increase in net earnings, up 27% to $2.034 billion for the nine months ended August 29, 2003, was primarily driven by the strong performance of the Trading and Principal Investments segment. This segment's revenues increased by 36% year-over-year, benefiting from favorable market conditions in credit products, interest rate products, and equity arbitrage.

The firm's balance sheet has expanded considerably. Total assets grew from $355.57 billion as of November 2002 to $394.14 billion as of August 2003. This growth was accompanied by an increase in total liabilities, but also a rise in shareholders' equity from $19.00 billion to $20.44 billion, indicating continued capital strength.

The Investment Banking segment experienced a revenue decline of 11% for the first nine months of fiscal 2003 compared to the prior year. This was attributed to continued weakness in industry-wide completed mergers and acquisitions. While underwriting revenues saw some strength from debt issuance, the overall outlook for this segment appears challenged by the M&A environment.