Goldman Reports Record Earnings
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
September 20, 2005 10:05 a.m.
Goldman Sachs Co. said net income rose 84% for the three-month period ending Aug. 31, to a record profit on the back of strong results in investment banking and fixed-income sales and trading. Revenue was up 61% for the quarter to $7.29 billion, easily surpassing expectations.
The New York investment bank earned $1.62 billion, or $3.25 a share, compared with $879 million, or $1.74 a share, a year ago. The Thomson First Call expectations were for earnings of $2.38 a share on revenue of $5.61 billion.
Revenue in the firm's trading and principal investments division rose to $5.06 billion, an 88% increase from $2.70 billion a year ago. The bulk of that revenue comes from the firm's fixed income, currency and commodities division, which earned $2.63 billion, a 41% rise from $1.87 billion a year earlier. Equity net revenue was $1.59 billion, a 75% increase from $910 million.
The investment-banking division recorded revenue of $1.02 billion, a 14% increase from a year ago. Financial advisory revenue rose 24% to $559 million, while underwriting revenue was up 4% to $456 million. The firm said it currently ranks first in world-wide announced mergers and acquisitions, equity and equity-related offerings and common stock offerings for 2005.
Net revenue in the asset-management division was $1.21 billion, 28% higher than the third quarter of 2004. Goldman Sachs said it has $520 billion under management, compared with $426 billion a year ago.
"This quarter's record results reflect the increasing confidence of our corporate and investor clients and the success our people have had in serving their needs," said Henry M. Paulson, Jr., chairman and chief executive.
The results come after Lehman Brothers Holdings Inc. and Bear Stearns & Co. both exceeded expectations for the third quarter, which is normally a slower time of the year. Bear Stearns said net income rose 34%, while Lehman's net rose 74%, as both companies benefited from a surge in investment-banking activity.
Goldman's board of directors declared a 25-cent dividend to be paid on Nov. 21 to shareholders of record as of Oct. 24. The board also authorized the repurchase of 60 million additional shares of Goldman stock.
Goldman Sachs recently reached an agreement to remain in downtown Manhattan with the construction of a 43-story office tower, which is scheduled to be completed by 2009. |
