Goldman slashes

Axe In Wood

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.

Hit the link below to access the complete Bloomberg article:

Goldman Sachs Cuts Costs, Boosts Dividend as Revenue Tumbles 20%

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image: © Torpe

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