You can always rely on Goldman Sachs.
Bloomberg News reports that Goldman Sachs said earnings were little changed as the bank cut costs in response to a 20% drop in revenue. But third-quarter net income rose to $1.52bn from $1.51bn a year earlier.
CEO Lloyd Blankfein is lowering expenses to show investors his firm can deliver higher returns while it waits on a cyclical climb in trading and investment-banking revenue that hasn’t arrived. The stock has traded below 1.5 times book value for the past 3 1/2 years, the longest such streak in the company’s history.
'Goldman typically outperforms, and cost controls help for the time being', Keith Davis, an analyst at Farr, Miller & Washington LLC, which manages more than $900m, said before the results were announced. 'We’re still optimistic, though the third quarter wasn’t a home run by any means'.
Expenses fell 25% to $4.56bn. Compensation, the firm’s biggest cost, dropped 35% to $2.38bn and amounted to 35% of revenue for the quarter, down from 44% a year earlier. The ratio was 38% for all of 2012.
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