David Solomon, chief executive officer of Goldman Sachs & Co., speaks during a Bloomberg Television interview at the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, April 29, 2019.
Patrick T. Fallon | Bloomberg | Getty Images
Goldman Sachs is scheduled to report third-quarter earnings before the opening bell Tuesday.
Here’s what Wall Street expects:
- Earnings: $7.69 per share, 49% lower than a year earlier, according to Refinitiv
- Revenue: $11.41 billion, 16% lower than a year earlier.
- Trading Revenue: Fixed Income $3 billion, Equities $2.59 billion
- Investing Banking: $1.84 billion
Will Goldman’s traders do well enough to offset weak investment banking results?
That’s the question after mixed bank reports so far. While Wall Street rivals including JPMorgan Chase and Morgan Stanley posted sharp declines in third-quarter investment banking revenue, better-than-expected fixed income results amid volatile markets helped buoy their institutional businesses.
Goldman’s traders tends to outperform other banks during periods of high volatility, which could help the firm. But falling markets could also result in markdowns in other divisions, which could offset some of that strength.
Another question is how long the bank’s consumer business will continue to lose money, a sore subject among investors because of its drag on the company while the stock has been depressed.
CEO David Solomon is set to announce a corporate reorganization that combines the bank’s four main divisions into three, according to people with knowledge of the plan. The move splits Goldman’s consumer operations and puts the parts into two new divisions, the people said.
Goldman shares trade for the lowest price to tangible book value ratio among the six biggest U.S. banks except for Citigroup, a situation that Solomon surely wants to address.
The bank’s shares have fallen almost 20% this year through Monday, compared with the 26% decline of the KBW Bank Index.
Last week, JPMorgan and Wells Fargo topped expectations for third-quarter profit and revenue by generating better-than-expected interest income. Citigroup also beat analysts’ estimates, and Morgan Stanley missed as choppy markets took a toll on its investment management business.
This story is developing. Please check back for updates.