Goldman Sachs Group Inc share price down, reports strong Q3 results to beat Wall Street forecast

On Thursday Goldman Sachs Group Inc reported a 48% increase in net income in Q3 and raised its quarterly dividends by five cents up to 60.

The results easily beat the projection of analysts pooled by Bloomberg, which reflected in $3.21 per-share earnings on revenue of $7.85 billion. In reality revenue increased 25% up to 8.4$ billion with earnings per share at $4.57, year-to-year. The company set aside $2.8 billion in employee payments and bonuses, 18% higher that last year, but 10% less as a percentage of revenue to 33%.

“Goldman’s compensation ratio is a wild card,” Devin Ryan, a bank analyst at JMP Group Inc. in New York, said for Bloomberg. “It’s a little bit of optics, because if the company didn’t adjust their comp ratio in the third quarter, then that would just leave them more room in the fourth quarter.”

Net income rose up to $2.24 billion, overtaking the analysts prediction of $1.5 million. Goldman Sachs reported a record assets under supervision at $1.15 trillion, with net inflows during the third quarter of $20 billion, including $13 billion in long-term assets under supervision.

Revenues from investing and lending hit $1.69 billion, 15% higher year-to-year and 18% lower compared to the second quarter of 2014. Sales in investment banking were $1.46 billion, a 24% annualized increase and an 18% decrease from the previous quarter.

“The combination of improving economic conditions in the US and a strong global franchise continued to drive client activity across our diverse set of businesses,” Lloyd Blankfein, CEO, said for the Financial Times.

During the second quarter all five big US Wall Street banks reported revenues below the zero mark. However, in the recent quarter the situation has changed and all of them released positive numbers, except Morgan Stanley which is will report on Friday.

Goldman Sachs continued its leadership in investment banking, ranking first in worldwide announced and completed mergers and acquisitions for the current year. The firm also ranked first in worldwide equity and equity-related offerings and common stock offerings for year-to-date.

Goldman Sachs Group Inc lost 2.63% on Thursday in New York to close at $172.58, marking a 6.37% one-year increase. The company is valued at $78.09 billion. According to the Financial Times, the 21 analysts offering 12-month price targets for Goldman Sachs Group Inc have a median target of $185.00, with a high estimate of $218.00 and a low estimate of $138.00. The median estimate represents a 7.49% increase from the last close of $172.58.