Goldman profit tops estimates as dealmaking cushions hit from GreenSky, real estate
By Saeed Azhar and Niket Nishant
NEW YORK (Reuters) -Goldman Sachs' third-quarter profit dropped less than expected as a nascent recovery in dealmaking offset an $864 million writedown related to its GreenSky fintech business and real estate investments.
Wall Street executives are more hopeful of a recovery in capital markets activities after dealmaking came to a near halt in 2022 in the wake of increased geopolitical risk following the war in Ukraine and the Federal Reserve's aggressive monetary tightening.
Goldman Sachs' Chief Executive David Solomon said he expects continued recovery in both capital markets and strategic activity such as mergers and acquisitions.
«The work we're doing now provides us a much stronger platform for 2024,» he said.
Goldman Sachs' net profit slumped 33% to $2.06 billion, or $5.47 per share, it said on Tuesday. Analysts on average had expected a profit of $5.31 per share, according to LSEG data.
Shares of the bank were down 0.2% in late morning trade, while shares of Bank of America, which also reported on Tuesday and beat estimates, were up 3.1%. Rival Morgan Stanley is set to report its earnings on Wednesday.
«It was a noisy quarter, but we believe exiting GreenSky was a good decision,» said David Konrad, analyst at Keefe, Bruyette & Woods in a note.
Goldman was an underwriter for high-profile initial public offerings (IPOs) in September, including SoftBank (TYO:9984) Group's chip designer Arm Holdings (NASDAQ:ARM) and grocery delivery app Instacart (NASDAQ:CART).
The share sales sparked optimism about a recovery in the IPO market, but poor performance after debuts, and the lukewarm reception to German sandal maker Birkenstock, have raised doubts about the strength of the market.
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