Goldman Sachs profit hit by weak bond trading

The Goldman Sachs Group Inc. reports quarterly financial results Thursday, October 15, 2015.

Third-quarter net income fell 36 percent to $1.43 billion, or $2.90 a share, from $2.24 billion, or $4.57, a year earlier, the New York-based company said Thursday in a statement. The trading community seemed to disregard the underperformance.

The Wall Street bank’s VaR indicator was $17 million, or down $2 million from the prior quarter and down $6 million from the same period a year earlier.

Investment-management revenue fell 3% to $1.4 billion. The global economy has been beset by slowdown in the emerging markets with China and Brazil being the notable laggards. Net revenue in Investing & Lending dipped 60 percent to $670 million, while revenue in Investment Management fell 3 percent to $1.42 billion. Four analysts surveyed by Zacks expected $7.29 billion.

In other Goldman Sachs news, major shareholder Goldman Sachs Group Inc purchased 20,449 shares of the firm’s stock in a transaction on Tuesday, September 29th. The most bullish analyst sees the stock heading towards $245 within the next 12 months while the most bearish sees the shares going to $175 in that same timeframe. Goldman Sachs Group Inc (GS) has a price to earnings ratio of 10.95 versus Financial sector average of 16.17. The company added $1.45 billion to reserves for litigation and regulatory proceedings in the second quarter and increased its estimate of possible losses beyond those reserves by 55 percent to $5.9 billion. Goldman said that was caused by a decline in the price of the public stocks it held. Deutsche Bank downgraded shares of Goldman Sachs from a “buy” rating to a “hold” rating and cut their price objective for the company from $218.40 to $206.00 in a report on Wednesday, June 24th.

Shares of Goldman Sachs (NYSE:GS) opened at 184.96 on Friday.

U.S. Bancorp was also slightly profitable in the third quarter, with a net income of $1.489 billion, or $0.81 per share, up from$1.483 billion in the previous quarter and up from $1.471 billion in the same quarter a year ago. Of those twenty-eight, ten have a Buy rating, sixteen have a Hold rating and two have a Sell rating. The services of the Investment Banking section include debt and equity underwriting of private placements and public offerings and strategic advisory assignments. Its Institutional Client Services section facilitates customer trades in fixed income, equity, currency and commodity products and makes marketplaces.

Goldman has stressed the bank’s commitment to trading, even as other banks have pulled back or exited the business to focus on less-volatile activities that require less capital.