Equities Trading 2016: Goldman Sachs (GS) Dominates Despite Volatile Market

Goldman Sachs Group exceeded analysts' mid-range and maximum expectations on Tuesday, announcing earnings per share (EPS) of $4.88 on revenues of $8.17 billion. The results towered above EPS forecasts of $3.86 and a second quarter EPS of $3.72, as well as a third quarter 2015 EPS of $2.90.

In addition to scoring major profits for the quarter ending in September, the bank outdid its competitors in a difficult equities market.

“We saw solid performance across the franchise that helped counter typical seasonal weakness,” Goldman Chief Executive Officer and Chairman Lloyd C. Blankfein said in the company’s press release. “We continue to manage our balance sheet conservatively and are benefiting from the breadth of our offerings to clients.”

Blankfein was likely referring to the 150-year-old bank’s decision to open its doors to depositors with smaller balances last spring, when it offered online accounts with minimums as low as $1.

The investment bank's profits also soared, with net income applicable to shareholders growing 29 percent from the previous quarter, to $2.1 billion from $1.63 billion, and 58 percent from the last year's third quarter, when profits stood at $1.33 billion.

Like JPMorgan Chase and Co., Citigroup Inc. and Bank of America, Goldman also reported strong growth in its fixed income, currency and commodities (FICC) trading, with a 34 percent increase in net FICC revenues over the past year.

Of its peers, the bank — which ranked number one globally in terms of completed mergers and acquisitions for the year — revealed the strongest growth in equities, as well. Goldman reported 2 percent increase in revenues from stock trading over the past year, while Bank of America suffered a 17 percent decline. JPMorgan’s was relatively flat and Citigroup’s fell 23 percent over the same period.

The equities market lag has often been attributed to S stock market volatility in light of uncertainty surrounding the so-called “Brexit,” the U.S. presidential election and worries of a Deutsche Bank collapse.

Shares of the company rose steadily Tuesday to $171.57 after closing at $169 on Monday afternoon.