Goldman Sachs beats quarterly profit estimates on equities strength (updated)

SK hynix

13/10/2026 12:28

Equities revenue jumps 72% in third quarter, FICC drops
Investment banking fee rises 21% despite broader M&A slowdown 
Goldman shares have gained 2.7% so far in 2026
Adds CEO's quotes on economy, AI, and succession
By Saeed Azhar and Pritam Biswas
Oct 13 (Reuters) - Goldman Sachs GS.N on Tuesday beat third-quarter profit estimates as dealmaking remained steady and volatile markets tied to the Middle East conflict lifted its equities revenue, sending its shares up nearly 1% in late morning trading. 
The Wall Street giant, however, posted lower fixed income, currency and commodities revenue, in line with the third-quarter trends at rivals JPMorgan Chase JPM.N and Wells Fargo WFC.N. The bank's FICC business has been choppy this year.
US equity markets were volatile during the quarter, driven by the Federal Reserve's interest-rate hike, rising fuel costs and a selloff in chip stocks. Investors reshuffled portfolios, resulting in higher revenue for the trading desks of banks. 
The equities business posted a 72% jump in quarterly revenue to $6.44 billion. 
"FICC came in light, which was somewhat expected based on recent bank conferences, but investment banking was a clear beat relative to consensus, which demonstrates a still robust pipeline of deal activity that is expected to keep this revenue line elevated into the next several quarters," said Stephen Biggar, analyst at Argus Research.
FICC revenue came in at $3.47 billion in the third quarter, down 1% from a year ago. The business' net revenue surged 32% in the second quarter, but had dropped 10% in the first quarter when its rates business was ​hit by volatility from the Iran war.
"Notwithstanding the current complexity and uncertainty in the world, we remain very well positioned to continue to deliver for our clients," CEO David Solomon said in a statement. 
Total profit was $5.29 billion, or $17.01 per share, for the three months ended September 30. That compares with $4.10 billion, or $12.25 per share, a year ago. Analysts expected a profit of $13.02 per share, according to estimates compiled by LSEG. 
Goldman's shares have gained about 2.7% so far in 2026, underperforming its closest peer Morgan Stanley MS.N and the S&P 500 .SPX. 


INVESTMENT BANKING HOLDS 
Goldman's investment banking division navigated a brief slowdown in dealmaking as M&A activity in the third quarter fell 41% from the prior three months to $993 billion, falling below $1 trillion for the first time since the second quarter of 2025, LSEG data showed. 
Investment banking fees rose 21% from a year ago to $3.22 billion. Goldman defied the broader market slowdown through higher debt and equity underwriting, alongside an 18% jump in advisory revenues. Advisory revenue was a record for the investment bank. 
The investment bank acted as joint lead bookrunner for Intel's INTC.O $23 billion equity offering and global coordinator for SK Hynix's 000660.KS $26.5 billion US offering.
It also advised the New York Yankees on a $2.6 billion financing deal with Apollo Sports Capital affiliates and Nvidia NVDA.O on its $3.5 billion investment in MediaTek 2454.TW.
Investment banking fees dropped 5% on a sequential basis, owing to significant activity in the second quarter. 
"The concern would be the high-rate environment slowing IPOs planned over the next several quarters, and if investors are satisfied after repositioning putting pressure on that exceptional trading fee performance," said Brian Mulberry, chief market strategist at Zacks Investment Management.  
Goldman CEO Solomon said the deals pipeline is robust despite the volatility in rates and markets.

        Meanwhile, rival JPMorgan JPM.N missed third-quarter estimates for profit on a softer performance in investment banking and less activity at its trading desks.
Solomon also spoke about the opportunities and risks from the AI investment cycle that is expected to generate trillions of dollars of investments in AI-related projects over the next few years.
He said it would be interesting to watch for political volatility around AI data centers ahead of midterm elections.
Solomon said as the financing needs for AI projects grow and there is pressure on rates, it could affect the returns and the viability of certain projects.
"But we feel very well-positioned to bring the full range of services and participate actively, and we still see an enormous amount of activity."
     
STRESS-FREE PRIVATE CREDIT 
Goldman Sachs' private credit fund said in September investor requests to pull money from one of its funds slowed further in the third-quarter tender offer, keeping it under the threshold 5% cap for the third straight quarter at a time when other private credit players are facing redemption requests. 
The asset and wealth management division, which houses the bank's private credit fund, reported a 14% jump in its revenue, marking another strong quarter. That helped total net revenue rise 23% to its second highest at $18.68 billion. 
The bank has expanded its asset and wealth management business in recent years to generate steadier earnings and reduce reliance on its volatile trading and investment banking units.

CEO SUCCESSION 
The Wall Street Journal reported last month Goldman had discussed a plan for Solomon, 64, to step down as CEO, to be replaced by Chief Operating Officer John Waldron, 57, as soon as next year, citing people familiar with the matter. 
"I just want to be clear: there is no succession transition or timeline underway at Goldman Sachs. The board and I are singularly focused on our strategy to grow the firm and continue to serve our clients to excel," Solomon told the analysts' briefing.
"I'm really enjoying the job. But more importantly, as a team, we're super excited about what's in front of us in the coming years, and how we can continue to grow the franchise and really accelerate the earnings potential of the firm."

     Solomon was appointed CEO in 2018, the same year Waldron became COO. Solomon scaled back the firm's consumer banking by shedding assets after its foray into retail banking flopped.


 (Reporting by Saeed Azhar in New York and Pritam Biswas in Bengaluru; Editing by Arun Koyyur and Nick Zieminski)
 ((Pritam.Biswas@thomsonreuters.com;))