LONDON, UK / ACCESSWIRE / October 21, 2016 / Active Wall St. announces its post-earnings coverage on The Goldman Sachs Group, Inc. (NYSE: GS). The company reported its financial results for the third quarter fiscal 2016 (Q3 FY16) on October 18, 2016. The New York-based investment bank's quarterly total net revenues and net earnings surged 19% y-o-y and 58% y-o-y, respectively, topping analysts' consensus estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.
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Earnings Reviewed
In Q3 FY16, Goldman Sachs's total net revenues surged to $8.17 billion from $6.86 billion in the prior year's comparable quarter, outperforming Wall Street's consensus of $7.42 billion. The company has posted its first double digit year-over-year growth in the last six quarters as the bank's fixed income, currency and commodities' revenue surged 34% year-over-year.
During the reported period, Goldman Sachs' net interest income declined 27% y-o-y to $614 million from $842 million in the year ago period. However, the company's Q3 FY16 total non-interest revenues surged 26% y-o-y to $7.55 billion from $6.02 billion in the prior year's quarter. Operating expenses for Q3 FY16 came in at $5.30 billion, 10% higher than $4.82 billion reported in Q3 FY15.
The global investment bank reported net earnings of $2.10 billion, or $4.88 per diluted share, in Q3 FY16, compared with $1.33 billion, or $2.90 per diluted share, in Q3 FY15. Analysts on Wall Street had expected the company to report net earnings of $3.82 per diluted share in Q3 FY16.
Performance Metrics
For the reported period, Goldman Sachs' assets under supervision came in at $1.35 trillion compared to $1.19 trillion in the prior year's comparable quarter. The company provided 11.2% of return on average common shareholders' equity in the reported period.
The bank's standardized Common Equity Tier (CET) 1 ratio stood at 14.0% as on September 30, 2016, compared to 13.7% as of June 30, 2016. Furthermore, Basel III Advanced CET 1 ratio was 12.4% as on September 30, 2016, compared to 12.2% as of June 30, 2016. During Q3 FY16, supplementary leverage ratio improved to 6.3% from 6.1% at the end of quarter ended June 30, 2016.
As of September 30, 2016, book value per common share and tangible book value per common were $181.25 and $171.45, respectively.
Segment Performance
During the quarter ended on September 30, 2016, Investment Banking division's revenues came in at $1.54 billion, marginally below $1.56 billion reported in the year ago quarter. During the quarter, Financial Advisory revenues recorded a 19% y-o-y decline, while revenues from Equity underwriting and Debt underwriting grew 19% and 17% y-o-y, respectively.
In Q3 FY16, Institutional Client Services' revenues advanced 17% y-o-y to $3.75 billion from $3.21 billion in Q3 FY15. The rise in revenue was due to a 34% y-o-y surge in revenues from Fixed Income, Currency, and Commodities Client Execution, along with a 22% and 2% y-o-y growth in Equities client execution and Securities services, respectively. However, the company witnessed a 12% y-o-y headwind in commissions and fees revenue.
The company's Investing & Lending division's revenue came in at $1.40 billion, which was 109% above $670 million reported in the year ago quarter. Both, Equity securities and Debt securities and loans witnessed a year-over-year growth of 149% and 59%, respectively.
Additionally, Investment Management division revenue advanced 4% y-o-y to $1.49 billion in Q3 FY16 from $1.42 billion in Q3 FY15. In the division, Incentive fees, and Transaction's revenues grew 56% and 7% on y-o-y basis; while Management and other fees reported a relatively flat y-o-y growth.
Dividend and Buyback
In its earnings press release on October 17, 2016, Goldman Sachs' Board of Directors declared quarterly cash dividend of $0.65 per common share, which is payable December 29, 2016, to shareholders of record on December 01, 2016.
The company further informed Wall Street that it had repurchased 7.8 million shares of its common stock worth $1.27 billion at an average cost per share of $162.83 in the quarter ended September 30, 2016.
Stock Performance
On Thursday, the stock closed the trading session at $174.51, flat for the day on a total volume of 2.47 million shares. Goldman Sachs' stock price advanced 4.48% in the last month, 9.22% in the past three months, and 5.49% in the previous six months. The company's shares are trading a PE ratio of 16.51 and have a dividend yield of 1.49%.
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