Goldman Sachs (NYSE:GS) delivered solid results this morning, and the shares are responding in early trading. For Q3, Goldman reported top-line revenue of $12.7 billion and net income of $2.99 billion. For the nine-month period, Goldman announced revenue of $39.64 billion and net income of $10.17 billion.
Earnings per share (EPS) was $8.40 for Q3 compared with $5.47 for the third quarter of 2023 and $8.62 for the second quarter of 2024. For the first nine months of 20224, EPS was $28.64 compared with $17.39 for the first nine months of 2023.
The increase by Goldman compared with the third quarter of 2023 reflected higher net revenues in Global Banking & Markets and Asset & Wealth Management, undermined by lower net revenues in Platform Solutions.
Investment banking fees delivered significantly higher net revenues in Debt underwriting, higher net revenues in Equity underwriting, and slightly higher net revenues in Advisory.
Private banking and lending revenues reflected the impact of higher deposit balances.
Platform solutions is part of Goldman’s attempt to morph into a Fintech. While digital consumer services is not longer a major focus, its institutional offerings seem to be a black sheep in the family of services.
Goldman said that the decrease in Consumer Platforms revenues is due to lower revenues from the General Motors credit card program, including a loss related to “the planned transitioning of the program to another issuer.” Transaction banking and other net revenues were also lower, primarily reflecting mark-downs related to the seller financing loans portfolio that was transferred to held for sale and lower average deposit balances.
Platform Solutions Q3 provision for credit losses was reported at $452 million related to the credit card portfolio – mostly driven by net charge-offs.
Platform Solutions is also where the Apple Card lives – something Goldman wants to exit as it focuses more on wheelhouse offerings.
Following the report, Goldman’s shares are trading almost 3% higher. The earnings call will take place today at 9:30 AM ET.
Update: During Q&A, noted banking analyst Mike Mayo asked a specific question about the status of the Apple Card. Goldman CEO David Solomon said there is a “lot of focus on this” and Goldman is continuing to narrow their consumer focus.
“We are running it, and we are improving it,” said Solom, while adding, “The direction of travel is pretty clear.”
It should be crystal clear that Goldman wants out of the partnership. Apple just needs to find a viable partner to continue the popular service. Rumblings have indicated that Apple has spoken to JP Morgan – among others – to keep the Apple Card up and running.
