NEW YORK -- Goldman Sachs Group Inc. reported flat third-quarter profit as the financial giant slashed expenses and endured a slump in trading revenue.
Goldman posted $1.52 billion in net income, or $2.88 a share, compared to $1.51 billion, or $2.85, in the third quarter last year.
The New York firm’s results beat the $2.43-per-share earnings expected by analysts polled by Thomson Reuters.
Net revenue declined by 20% year-over-year to $6.72 billion. Goldman’s investment banking business was flat and it saw a slight rise in investment management revenue.
But the bank saw a 44% drop in revenue from trading in bonds, currency and commodities. The bank cited “economic uncertainty, difficult market-making conditions in certain businesses and lower levels of activity.”
Other major Wall Street firms, including JPMorgan Chase & Co. and Citigroup Inc., have reported a slowdown in fixed-income trading.
“The third quarter’s results reflected a period of slow client activity,” Lloyd Blankfein, chairman and chief executive said in a statement.
“As longer term U.S. budget issues are resolved,” Blankfein added, “we could see an improvement in corporate and investor sentiment that would help lay the basis for a more sustained recovery.”
To maintain its bottom line, Goldman reduced costs by 25% to $4.56 billion in the third quarter. Compensation expenses fell 35%, though its total staff increased 3% from the third quarter last year.
Goldman’s shares fell $4.44, or 3%, to $157.81 in pre-market trading on Wall Street.