Business, Finance & Economics

Goldman Sachs reports third quarter loss


After falling short of its quarter two estimates, Goldman Sachs is likely to lay off 1,000 employees by the end of the year.


Chris Hondros

Goldman Sachs reported its second quarterly loss since it went public in 1999 as the firm lost money on investments and as revenue declined from trading, asset management and securities underwriting, Bloomberg reports.

The investment bank reported a net loss of $393 million, or 84 cents per share, for the third quarter ending Sept. 20, according to the Securities and Exchange Commission filing. Net revenues in investment banking suffered a 33 percent loss from the third quarter in 2010, leaving it at $781 million.

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"The broader environment served as a significant headwind," said David Viniar, the firm’s chief financial officer, the Los Angeles Times reports . "We are clearly disappointed about our results."

Goldman also lost nearly $3 billion on investments in stocks, bonds and a stake in a Chinese bank, the Associated Press reports. Still investors weren’t affected by the loss, largely due to the tumultuous financial markets, AP reports.

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“Well, we were braced for impact and we got it," Nomura analyst Glenn Schorr wrote in a note to clients, the AP reports.

While the losses were expected, the LA Times reports that analysts found the numbers to be worse than predicted. In spite of commercial bank improvements, Wall Street companies are still suffering from market swings and the hurting global economy, LA Times reports.

“I suspected that trading would be off given what happened in the quarter, but it was a little bit worse than expected,” said Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors in Cincinnati, which oversees $14.5 billion and owns Goldman Sachs stock, Bloomberg Business Week reports.

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