Goldman Sachs earned $5.29 billion in the third quarter, or $17.01 a diluted share, according to its earnings release on Tuesday. After $172 million of preferred dividends, earnings for common shareholders were $5.12 billion, the figure AFP rounded to $5.1 billion, up 33 per cent from a year earlier. Reuters said analysts expected $13.02 a share, according to LSEG, the figure we cited in our Monday preview. Net revenue rose 23 per cent from a year earlier to $18.68 billion.
That is a beat of $3.99 a share, or about 31 per cent, by this publication's arithmetic. It came hours after JPMorgan's miss. The difference sits mostly in one line.
One line did most of the work
Equities net revenue was $6.44 billion, up 72 per cent from $3.74 billion a year earlier. Our preview carried two estimates for that line: $4.68 billion from IG and $4.96 billion from Zacks. Against IG's figure, equities came in $1.76 billion higher. Total net revenue beat the $16.71 billion consensus IG cited by about $1.97 billion, so on IG's two numbers the equities line accounts for roughly 89 per cent of the revenue surprise. That is our arithmetic, and other providers' line estimates differ.
Fixed income, currencies and commodities (FICC) revenue was $3.47 billion, essentially unchanged from $3.49 billion a year earlier and below Zacks's $3.72 billion estimate. Reuters noted that FICC had risen 32 per cent in the second quarter and fallen 10 per cent in the first. Investment banking fees were $3.22 billion, up 21 per cent from a year earlier and down 5 per cent from the second quarter, above both preview estimates. Advisory brought in $1.65 billion, which Reuters said was a record, even as third-quarter M&A volume fell 41 per cent from the previous three months to $993 billion.
Where the beat leaked
Against the second quarter, the picture is weaker. Earnings per share fell 19 per cent from $20.98, and net earnings fell 20 per cent from $6.63 billion. Equities revenue fell 13 per cent from $7.42 billion.
Operating expenses were $11.31 billion. Compensation and benefits fell to $5.12 billion from $6.10 billion, about 27 per cent of net revenue against 30 per cent in the second quarter, on our arithmetic. Everything else rose. Other expenses were $1.10 billion against $559 million, which Goldman attributed to significantly higher charitable contributions to Goldman Sachs Gives. Non-compensation expenses were about $6.19 billion, roughly $617 million more than in the second quarter.
Provisions for credit losses were $368 million, up from $102 million, and the release says they mainly reflected impairments on wholesale loans. Platform Solutions revenue was $170 million, against $598 million a year earlier, with net markdowns on the Apple Card loan portfolio, which the bank moved to held for sale in the fourth quarter of 2025.
The tax line helped. Goldman said tax benefits from settling employee share-based awards cut its provision by about $975 million over the first nine months, adding about $3.20 to diluted EPS. It does not give the third-quarter share, so we cannot say how much of the $17.01 it represents. The nine-month effective rate was 20.4 per cent; the quarter's, by our arithmetic, was about 24 per cent.
Capital and the share price
The common equity tier 1 (CET1) ratio under standardized rules was 12.4 per cent, down from 12.9 per cent in June. The bank bought back $3.00 billion of stock in the quarter at an average price of $1,048.73. Monday's close of $893.95, the Yahoo Finance figure in our preview, was about 15 per cent below that average, by our arithmetic. The board declared a dividend of $5.00 a share on Monday, payable on 30 December. Headcount was 47,500, up 3 per cent from June, which the bank put down to the timing of campus hires.
The market's verdict depends on when you looked. Shares rose 3.6 per cent in early trading, Reuters reported. AFP had them up 0.2 per cent in early afternoon. A gain that fades over a day suggests investors looked past the headline to the sequential decline.
What happens next
Reuters attributed the trading strength to volatility tied to the Middle East conflict, the Federal Reserve's interest-rate hike, rising fuel costs and a selloff in chip stocks. Stephen Biggar, an analyst at Argus Research, told Reuters that "investment banking was a clear beat relative to consensus." Brian Mulberry, chief market strategist at Zacks Investment Management, was more cautious: "The concern would be the high-rate environment slowing IPOs planned over the next several quarters," he told Reuters. Chief executive David Solomon said in a statement, as quoted by Reuters, that the firm remains "very well positioned to continue to deliver for our clients."
The results also land in the middle of a succession story. The Wall Street Journal reported on 28 September that the board had discussed Solomon stepping down, with chief operating officer John Waldron succeeding him around the end of 2027 or in 2028, AFP said. Goldman spokesman Tony Fratto told Reuters the board regularly discusses succession but there is no definitive timeline.
Morgan Stanley reports on Wednesday. For Goldman, the test is the fourth quarter. If volatility fades while costs, provisions and the capital drawdown stay where they are, $17.01 will look like the top of the range.
All Goldman Sachs financial figures (net revenues, net earnings, net earnings to common, EPS, segment and line revenues, expenses, provisions, the nine-month tax rate and share-based award tax benefit, capital, buybacks, dividend and headcount) come from the bank's third-quarter 2026 earnings results, furnished to the SEC on Form 8-K on 13 October 2026, which also carries the second-quarter and year-earlier comparisons. The $13.02 LSEG consensus, the FICC history, the advisory record, the M&A volume figure, the early-trading share move, the causes of volatility, the comments of Stephen Biggar and Brian Mulberry, Tony Fratto's statement and David Solomon's "very well positioned" remark come from Reuters (Saeed Azhar and Pritam Biswas) as published by BNN Bloomberg on 13 October. The $5.1 billion profit figure, the 33 per cent growth figure, the Wall Street Journal succession timing and the early-afternoon share move are from AFP via France 24, 13 October. The preview estimates for revenue, equities, FICC and investment banking are from the IG and Zacks previews cited in our 12 October story, as is the Monday closing price of $893.95 (Yahoo Finance quote data). The size of the beat, the equities share of the revenue surprise, the compensation ratios, non-compensation expenses, the quarterly tax rate and the buyback-price comparison are this publication's arithmetic. The analysis is our own.
Topics marketsbanksGoldman Sachsearnings
