Catalyst Capital Advisors co-founder and CIO David Miller dissects ‘strong earnings growth’ and more as markets recover after easing trading tensions on ‘Making Money’.
Goldman Sachs beat Wall Street expectations for third-quarter earnings on Tuesday as investment bankers earned higher advisory fees and recovering markets boosted revenue from managing clients’ assets.
The bank’s prediction that it would be a banner year for dealmaking has come true as companies revive their plans for mergers and stock exchange listings.
Investment banking expenses at Goldman rose 42% to $2.66 billion in the quarter ended September 30 from a year ago. Analysts had expected a 14.3% increase, according to LSEG’s average estimate.
Goldman Sachs CEO David Solomon (Michael Nagle/Bloomberg via / Getty Images)
JPMORGAN RAISES INTEREST EARNINGS FORECAST AFTER EARNINGS REACHES ESTIMATE
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GS | THE GOLDMAN SACHS GROUP INC. | 786.78 | +22.42 |
+2.93% |
A Goldman executive said the firm has advised $1 trillion in announced mergers and acquisitions to date, $220 billion more than its nearest competitor.
It advised Electronic Arts on its $55 billion sale to a consortium of private equity firms and the Saudi Public Investment Fund this year, and also advised Holcim on the spin-off of its North American business Amrize, now valued at $26 billion.
Goldman also advised Fifth Third Bancorp, which this month agreed to buy regional lender Comerica in a $10.9 billion deal to create the ninth-largest U.S. bank.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| E.A | ELECTRONIC ARTS INC. | 200.29 | +0.27 |
+0.13% |
| FITB | FIFTH THIRD BANCORP | 42.20 | +0.73 |
+1.76% |
| CMA | COMERICA INC. | 77.37 | +1.50 |
+1.98% |
INCREASE CONSULTATION COSTS
The growth was fueled by a 60% increase in advisory fees, while debt and equity underwriting fees also rose. Rival JPMorgan Chase also reported robust investment banking figures.
Jamie Dimon, CEO of JPMorgan Chase & Co., speaks at the National Retirement Summit in Washington, DC, on March 12, 2025. (Al Drago/Bloomberg via Getty Images)
Goldman shares fell 1.8% in premarket trading after the results. Shares are up 37% since Monday, reflecting the rebound in dealmaking.
“This quarter’s results reflect the strength of our customer base and focus on executing our strategic priorities in an improved market environment,” CEO David Solomon said in a statement.
“We know conditions can change quickly and that’s why we remain focused on strong risk management,” he said, echoing JPMorgan CEO Jamie Dimon’s cautious optimism.
GREAT INVESTORS TOUCH ETFS FOR THREE HOT ASSETS, ACCORDING TO GOLDMAN SACHS
According to data from Dealogic, global M&A volumes exceeded $3.43 trillion in the first nine months of the year, with nearly 48% of that in the US.
The period also saw the highest average M&A volume globally and in the US since 2015, in line with Solomon’s forecast at last year’s Reuters NEXT conference.
Goldman was among the joint book-running managers of major IPOs in the quarter, including design software company Figma, Swedish fintech Klarna and space technology company Firefly Aerospace.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FIG | FIG | 61.82 | -2.46 |
-3.83% |
| CLEAR | KLARNA GROUP PLC | 38.18 | -0.91 |
-2.33% |
| FLY | FIREFLY AEROSPACE INC COM USD0.0001 | 28.38 | -1.50 |
-5.02% |
Total quarterly profit was $4.1 billion, or $12.25 per share, surpassing Wall Street expectations of $11 per share.
“The capital markets machine has clearly kicked into high gear, with robust share prices, reduced regulatory pressure and the prospect of lower interest rates likely to keep the momentum going,” said Stephen Biggar, a banking analyst at Argus Research.
Goldman executives have become increasingly optimistic about dealmaking in recent months, with Solomon saying in September that it had one of the busiest weeks for IPOs in more than four years.
FOCUS ON ASSET AND ASSET MANAGEMENT
Wealth and asset management revenue rose 17% to $4.4 billion, marking the first quarterly jump this year for the segment. This reflected record high management fees and private banking and lending revenues.
The business is a top priority for Goldman as it seeks more stable fee income to offset volatility in its advisory and trading businesses.
JAMIE DIMON WARNS OF MAJOR MARKET RISK IN THE NEXT FEW YEARS
Goldman said last month it would take a stake of as much as $1 billion in T. Rowe Price, as part of a partnership to tap the asset manager’s pension money for alternative assets.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TROW | T. ROWE PRICE GROUP INC. | 105.36 | +3.93 |
+3.87% |
Assets under supervision rose to $3.45 trillion, driving management fees up 12%.
Goldman set aside $339 million as a provision for credit losses, compared with $397 million a year ago. The provisions mainly related to the credit card portfolio.
Wealth and asset management revenue rose 17% to $4.4 billion, marking the first quarterly jump this year for the segment. (Jeenah Moon/Bloomberg via Getty Images)
SUSTAINABLE TRADE RESILIENCE
Wall Street’s trading desks have reaped the benefits of record volatility as clients adjust their portfolios to keep pace with changes in President Donald Trump’s trade, foreign and tax policies.
However, the third quarter remained one of Wall Street’s quietest quarters in nearly six years, as a rate cut by the Federal Reserve and robust AI investments pushed major U.S. stock indexes to record highs.
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Still, Goldman’s equity trading revenues rose 7% to $3.74 billion, fueled by higher revenue from financing, which offset lower income from cash shares.
Fixed income, currencies and commodities raked in $3.47 billion, up 17% from a year ago.
