Goldman Sachs is set to report third-quarter earnings — here's what Wall Street expects - CNBC

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David Solomon, chief executive officer of Goldman Sachs Group Inc., at the Goldman Sachs Financial Services Conference in New York, Dec. 6, 2022.

Michael Nagle | Bloomberg | Getty Images

Goldman Sachs is scheduled to report third-quarter earnings before the opening bell Tuesday.

Here's what Wall Street expects:

• Earnings: $5.31 a share, according to LSEG, formerly known as Refinitiv
• Revenue: $11.19 billion
• Trading revenue: fixed income $2.8 billion, equities $2.73 billion, per StreetAccount
• Investment banking revenue: $1.48 billion

Is Wall Street deal-making on the mend?

Among its big bank peers, Goldman Sachs is the most reliant on investment banking and trading revenue.

While it's made efforts under CEO David Solomon to diversify its revenue stream, first in an ill-fated retail banking push and later as it emphasized growth in asset and wealth management, it is Wall Street that powers the company. Last quarter, trading and advisory accounted for two-thirds of Goldman's revenue.

That's been a headwind as mergers, initial public offerings and debt issuance all have been muted this year as the Federal Reserve boosted interest rates to slow the economy down. With signs that activity has picked up lately, analysts will be eager to hear about Goldman's pipeline of deals.

At the same time, Goldman has taken hits from two areas: Its strategic retrenchment away from retail banking has saddled the firm with losses as it finds buyers for unwanted operations, and its exposure to commercial real estate has resulted in write-downs as well.

Last week, Goldman said that its sale of lending business GreenSky will result in a 19 cents per share hit to third-quarter results.

Analysts will be keen to hear Solomon's view on the investment banking outlook, as well as how the remaining parts of its consumer effort — mainly, its Apple Card business — fit in the latest iteration of Goldman Sachs.

Goldman shares have dropped 8.4% this year through Monday, a better showing than the 21% decline of the KBW Bank Index.

Last week, JPMorgan, Wells Fargo and Citigroup each topped expectations for third-quarter profit, helped by better-than-expected credit costs. Morgan Stanley posts results Wednesday.  

This story is developing. Please check back for updates.

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Goldman Sachs is set to report third-quarter earnings — here's what Wall Street expects - CNBC
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