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Goldman Sachs Reports Third Quarter Earnings Per Common Share Of $2.85 And Increases The Quarterly Dividend To $0.50 Per Common Share

Stocks in this article: GS

The Goldman Sachs Group, Inc. (NYSE: GS) today reported net revenues of $8.35 billion and net earnings of $1.51 billion for the third quarter ended September 30, 2012. Diluted earnings per common share were $2.85 compared with a diluted loss per common share of $0.84 for the third quarter of 2011 and diluted earnings per common share of $1.78 for the second quarter of 2012. Annualized return on average common shareholders’ equity (ROE)  (1) was 8.6% for the third quarter of 2012 and 8.8% for the first nine months of 2012.

Highlights

  • Goldman Sachs continued its leadership in investment banking, ranking first in worldwide announced and completed mergers and acquisitions for the year-to-date.  (2)
  • The firm ranked first in worldwide equity and equity-related offerings and common stock offerings for the year-to-date.  (2)
  • Book value per common share and tangible book value per common share  (3) both increased approximately 3% during the quarter to $140.58 and $129.69, respectively.
  • The firm continues to manage its liquidity and capital conservatively. The firm’s global core excess liquidity  (4) was $170 billion  (5) as of September 30, 2012. In addition, the firm’s Tier 1 capital ratio under Basel 1  (6) was 15.0%  (5) and the firm’s Tier 1 common ratio under Basel 1  (7) was 13.1%  (5) as of September 30, 2012.

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“This quarter’s performance was generally solid in the context of a still challenging economic environment,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer. “We continue to be disciplined in managing our operations and capital, while effectively serving our clients’ needs. The focus on these priorities will serve our shareholders and the firm well over the longer term.”

Net Revenues

Investment Banking

Net revenues in Investment Banking were $1.16 billion, 49% higher than the third quarter of 2011 and 3% lower than the second quarter of 2012. Net revenues in Financial Advisory were $509 million, slightly lower compared with the third quarter of 2011. Net revenues in the firm’s Underwriting business were $655 million, more than double the amount in the third quarter of 2011, which had particularly low volumes. This increase primarily reflected significantly higher net revenues in debt underwriting, principally due to higher net revenues from leveraged finance activity. Net revenues in equity underwriting were higher compared with the third quarter of 2011, primarily reflecting an increase in client activity. The firm’s investment banking transaction backlog declined slightly compared with the end of the second quarter of 2012.  (8)

Institutional Client Services

Net revenues in Institutional Client Services were $4.18 billion, 3% higher than the third quarter of 2011 and 8% higher than the second quarter of 2012.

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