Goldman Sachs seen headed to steep earnings drop as deal-making lags

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Goldman Sachs appears headed to another set of weak quarterly earnings as deal-making lags and the bank retreats from a loss-making consumer business...

NEW YORK - Goldman Sachs appears headed to another set of weak quarterly earnings as deal-making lags and the bank retreats from a loss-making consumer business. Goldman is expected to report third-quarter earnings per share of $5.31 when it reports results on Tuesday, according to average estimates compiled by LSEG. That would reflect a 36% decline from its EPS of $8.25 a year earlier.

The company's third-quarter results will be depressed by writedowns of $300 million to $350 million on its commercial real estate assets, analysts wrote, after it set aside $485 million in the second quarter.Goldman Sachs declined to comment ahead of its earnings. CEO David Solomon is scaling down the company's consumer business after it lost $3 billion over three years.

While the stock "is one of the best plays on a recovery" in investment banking, threats are mounting to such a bounce-back, UBS analyst Brennan Hawken wrote in a note. Sluggish markets prompted the firm to lay off thousands of employees in January in its biggest round of layoffs since the 2008 financial crisis.

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