Goldman Sachs has turned in third-quarter earnings that easily beat analysts' estimates, but the bank's mood seemed more cautious than celebratory.
Revenue jumped as the company underwrote more stock and bond offerings, a tentative sign that companies are more willing to take risks like going public or raising money. The bank's investments in stocks and bonds came back from a loss a year ago and turned a profit, riding a wave of higher stock prices around the world.
Trading for clients in mortgages also propelled Goldman's results higher, echoing what Wells Fargo and JPMorgan Chase reported last week as mortgage refinancing surged. Goldman's earnings were good enough that the bank raised its quarterly dividend to 50 cents per share from 46 cents.
Citigroup analyst Keith Horowitz called the quarter "a very solid performance in a generally poor environment."
There were still signs that Goldman could have gaps in its armour.
The storied investment bank has been slashing jobs and trimming expenses, and the July-to-September period was no exception. The bank shed about 1600 jobs, or 5 per cent of its work force, compared with a year ago, and cut spending on communications, occupancy and market development.
Goldman is different from most of the other big US banks because it deals almost exclusively with institutions, rather than consumers. Its clients are usually mutual funds, international corporations, other banks and similar firms.
Goldman was hardly the biggest story in banking Tuesday. Shortly after Goldman released its earnings results in the early morning, Citigroup announced that its CEO, Vikram Pandit, was stepping down.
At Goldman, net income for common shareholders was $US1.5 billion ($A1.47 billion), or $US2.85 ($A2.79) per share. Analysts had been predicting $US2.19 ($A2.14) per share, according to FactSet.
Revenue also beat estimates, breezing past the $US7.2 billion ($A7.04 billion) forecast by analysts and more than doubling to $US8.4 billion ($A8.22 billion), from $US3.6 billion ($A3.52 billion) a year ago.
Goldman's stock fell $US1.28 ($A1.25) to close at $US123.22 ($A120.51) overnight.