01—Abstract
Summary
Summary of the 10-Q filed November 1, 2019. Cited figures are marked; the original filing is the authoritative source.
Goldman Sachs Group, Inc. (GS) reported its third-quarter 2019 results with net earnings of $1.88 billiona, a decrease of 26% year-over-year, and diluted EPS of $4.79, down 24%.
This decline was primarily driven by lower net revenues in Investing & Lending and Investment Banking, due to weaker performance in equity securities and financial advisory, respectively. While Institutional Client Services saw improved net revenues, particularly in FICC Client Execution, it was not enough to offset the overall decline.
The firm continued to return capital to shareholders, repurchasing $673 millionb of common stock and paying $466 million in dividends during the quarter. Goldman Sachs maintained a strong capital position, with a Common Equity Tier 1 (CET1) ratio of 13.4% under the Advanced Capital Rules as of September 30, 2019.
02—Key points
Key Highlights
- Net earnings of $1.88 billion for Q3 2019, down 26% year-over-year, reflecting broader market headwinds.
- Diluted EPS of $4.79, down 24% year-over-year, indicating reduced profitability on a per-share basis.
- Net revenues declined 6% to $8.32 billion, primarily due to weaker performance in Investing & Lending and Investment Banking.
- Investing & Lending segment saw a significant drop in net revenues, down 17% to $1.68 billion, largely driven by lower gains in equity securities.
- Investment Banking segment's net revenues decreased by 15% to $1.69 billion, impacted by lower advisory and underwriting fees.
- Institutional Client Services showed resilience with a 6% increase in net revenues to $3.29 billion, driven by solid client activity in FICC Client Execution.
- Strong capital position maintained with a CET1 ratio of 13.4% as of September 30, 2019, well above regulatory minimums.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2019filed November 1, 2019Financial Statements
Q3 FY2019 against Q3 FY2018
| Line item | Q3 FY2019Q3 FY2018 | Change |
|---|---|---|
| Interest Expense | $4.45B$4.21B | +5.9% |
| Net Income | $1.88B$2.52B | −25.6% |
| EPS (Basic) | $4.83$6.35 | −23.9% |
| EPS (Diluted) | $4.79$6.28 | −23.7% |
| Shares Outstanding (Basic) | 370.00M385.40M | −4.0% |
| Shares Outstanding (Diluted) | 374.30M390.50M | −4.1% |
05—Questions
Frequently Asked Questions
What was Goldman Sachs' overall financial performance in Q3 2019?
Goldman Sachs reported net earnings of $1.88 billion for the third quarter of 2019, a decrease of 26% compared to the same period in the prior year. Diluted earnings per share (EPS) was $4.79, down 24% year-over-year. Net revenues decreased by 6% to $8.32 billion.
Which business segments contributed most to the decline in earnings?
The Investing & Lending segment experienced a significant 17% year-over-year decline in net revenues, primarily due to lower gains from equity securities. The Investment Banking segment also saw a 15% decrease in net revenues, impacted by lower activity in financial advisory and underwriting.
How did the Institutional Client Services segment perform?
The Institutional Client Services segment showed a positive trend, with net revenues increasing by 6% to $3.29 billion. This growth was mainly driven by higher client activity in FICC Client Execution, which saw an 8% increase in net revenues.
What is Goldman Sachs' capital position?
Goldman Sachs maintained a strong capital position, with its Common Equity Tier 1 (CET1) capital ratio at 13.4% as of September 30, 2019, which is well above regulatory requirements. The firm also returned $1.14 billion in capital to shareholders through share repurchases and dividends during the quarter.
06—Continue