Goldman Sachs Group Inc. reported a third-quarter profit, reversing a year-earlier loss, as revenue more than doubled due to gains in stocks and bonds the investment bank holds as investments.
Goldman on Tuesday posted earnings applicable to common shareholders of $1.5-billion, or $2.85 per share, compared with a loss of $428-million, or 84 cents per share, a year earlier. Net revenue rose to $8.35-billion from $3.6-billion.
Analysts had expected, on average, earnings of $2.12 per share, according to Thomson Reuters I/B/E/S.
Most of Goldman’s revenue gains came from its investing and lending division, which consists of stocks and bonds it holds as investments. The value of those assets rose after the U.S. Federal Reserve unveiled a new program to boost liquidity, but trading volumes and deal activity were still muted.
The bank reported $1.8-billion in revenue from that business; a year earlier, the investing and lending division reduced overall revenue by $2.5-billion.
In a statement, Goldman chief executive officer Lloyd Blankfein described the bank’s third-quarter performance as “generally solid.”
Goldman shares were up 50 cents to $125.00 in premarket trading.
The bank raised its quarterly dividend to 50 cents per share from 46 cents.
The value of Goldman’s debt rose during the latest quarter, requiring the company to take a charge that reduced earnings by $370-million.
It took a similar accounting charge in the 2011 third quarter, as well as a charge for buying back preferred stock from billionaire investor Warren Buffett.