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Goldman's streak ends
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September 22, 1998: 5:00 p.m. ET
Record-setting profit growth ends amid market turmoil, pending IPO
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NEW YORK (CNNfn) - Goldman Sachs Group L.P., which is in the midst of its landmark initial public offering, reported on Tuesday that its streak of record-setting profit growth came to an end in the third quarter.
In addition, the private partnership warned that adverse market conditions will hurt fourth-quarter earnings as well. The disappointing development comes as brokerage firms as a whole get ready to report their worst quarterly results in nearly four years.
The private partnership reported pretax profits of $754 million in the third quarter, a decline of 19 percent from last year's record-setting level of $932 million.
Revenues slipped 3.9 percent in the quarter to $2.14 billion from $2.23 billion a year ago.
Goldman, which recently announced plans to go public, did not specify where the trading difficulties may have occurred, but the bank has recently said its losses in Russia were minimal.
"The firm's investment banking advisory business, particularly in mergers and acquisitions, demonstrated a strong performance in the third quarter, and asset management continued its steady growth," said Goldman's Chief Financial Officer John Thain.
"Our trading and underwriting business were down from record first-half levels in an increasingly difficult environment."
"More recently, increased volatility in the financial markets, the widening of credit spreads, a decline in liquidity in certain markets, and a reduction in global equity values have adversely affected many participants in the financial services sector, including Goldman Sachs. We expect these conditions to negatively impact our fourth-quarter results," his statement continued.
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Goldman Sachs
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