Goldman Sachs announced it expects fourth quarter earnings to take a $5bn knock. This is mainly attributed to the new US tax laws signed by US President Donald Trump a few weeks ago. Of the $5bn, two-thirds will be related to repatriation tax. The new laws significantly lower the tax rate for US companies to 21%, down from 35%. As a result, companies will now be able to repatriate cash from overseas at far better rates.
Goldman Sachs released its latest quarterly results on Tuesday, with the group easily beating expectations for both earnings and revenue. During the quarter, the group saw revenues at $7.89bn, higher than estimates of $7.52bn. However, despite the better-than-expected revenue, a sharp decline in bond trading revenue weighed on the group’s shares. Revenues from fixed income, currencies and commodities trading slumped by 40% compared to the second quarter of 2016. Goldman Sachs recorded adjusted earnings per share of $3.95, much higher than expectations of $3.39 per share.
On Wednesday, Goldman Sachs traded lower, down 0.62%, despite the group releasing quarterly results which blew away analyst expectations on strong fixed income trading.. During the period, Goldman saw its revenues come in at $8.17bn, sharply higher than estimates of $7.742bn. This better-than-expected increase was mainly due to a jump in trading revenue, with revenue from bond-related trading increasing by 78.3% over the last year to $2bn. The group reported earnings of $5.08 per share, compared to expectations of $4.82 per share, with $2.15bn in net income representing a near-quadrupling in profit.
On Tuesday, Goldman Sachs joined a number of other major US banks to beat analysts’ estimates after the group released better-than-expected results. For the quarter, revenue came in at $7.93bn, better than estimates of $7.58bn, but lower than the $9.07bn reported a year ago. However, earnings per share increased to $3.72, up from $1.98 a year ago, and sharply higher than expectations of $3. This was partly attributable to the group’s fixed income, currency and commodity trading unit, which featured among its top performing units. During the period, it recorded revenue of $1.93bn, a 20% increase compared to the previous corresponding period.