The bank's third quarter profit is down, but it still beat Street expectations
Goldman Sachs Group Inc., the larger of the nation's two remaining major independent investment banks, on Tuesday reported its worst drop in profits since going public in 1999.
The investment bank reported that its third-quarter profit plunged 71 percent to $810 million after preferred dividend payments versus a year ago. Goldman's results reflect continuing damage from the ongoing credit crisis that has already vanquished three of its rivals.
Goldman Sachs and Morgan Stanley remain the only major independent investment banks on Wall Street after a major shake-up of the investment banking industry. Lehman Brothers Holdings Inc. filed for bankruptcy Monday after succumbing to distressed real estate holdings, while Bear Stearns Cos. and Merrill Lynch & Co. were swallowed by commercial banks.
"This was a challenging quarter as we saw a marked decrease in client activity and declining asset valuations," said Chairman and Chief Executive Lloyd C. Blankfein in a statement.
The New York-based investment bank said its earnings amounted to $1.81 per share in the three months ended Aug. 29, down sharply from $2.81 billion, or $6.13 per share, in the same quarter last year. Revenue skidded 51 percent to $6.04 billion from $12.3 billion a year ago.
However, profit still beat Wall Street projections for $1.71 per share, according to analysts polled by Thomson Reuters. Revenue fell short of the $6.23 billion expected by analysts.
Goldman shares tumbled $9.35, or 6.9 percent, to $126.14 in premarket electronic trading. The stock is now down almost 50 percent from its 52-week high of $250.70.