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Goldman Sachs Posts Bigger-Than-Expected Loss

Tuesday, 18 Oct 2011 07:55 AM

Goldman Sachs Group Inc. posted a wider-than-expected loss of $428 million for the third quarter, only its second quarterly loss as a public company, hurt by sharp declines in the value of investment securities and customer trading assets.

Chief Executive Lloyd Blankfein cited difficult market conditions and a lack of confidence among investors and corporate clients for the poor results.

"Our results were significantly impacted by the environment and we were disappointed to record a loss in the quarter," Blankfein said.

Shares of the largest U.S. investment bank by assets were down 2 percent in premarket trading.

Goldman's loss-driver was its Investing & Lending division, which holds stocks, bonds, loans and private equity assets as long-term investments.

The division reported negative revenue of $2.48 billion as the value of those assets dropped sharply. Goldman's stock investment in Industrial and Commercial Bank of China Ltd. alone generated more than $1 billion of paper losses.

Goldman was also hurt by big declines in bond trading and investment banking revenue.

Its fixed income, currency and commodities client trading business reported $1.73 billion in revenue, a 36 percent decline from a year earlier. Investment banking revenue dropped 33 percent to $781 million.

Overall, Goldman's net revenue totaled $3.6 billion, down 60 percent from a year earlier and down 51 percent from the 2011 second quarter.

Its third-quarter loss amounted to 84 cents per share, compared with a profit of $2.98 per share a year earlier. On average, analysts had expected a loss of 16 cents per share.

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Goldman Sachs Group Inc. posted a wider-than-expected loss of $428 million for the third quarter, only its second quarterly loss as a public company, hurt by sharp declines in the value of investment securities and customer trading assets. Chief Executive Lloyd Blankfein...
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