Yahoo Finance’s Alexandra Semenova joins the Live show to discuss third-quarter earnings for Goldman Sachs.

Video Transcript

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BRAD SMITH: Let's check in on Goldman Sachs stock this morning after it posted a beat on earnings and revenue for the third quarter. Goldman Sachs CEO David Solomon echoing JPMorgan CEO Jamie Dimon's comments this morning that a recession is likely coming. Yahoo! Finance's Alexandra Semenova here with us to break down the results. All right, Alex, what's sticking out to you on the earnings front from Goldman Sachs this morning?

ALEXANDRA SEMENOVA: Well, guys, Goldman Sachs, yet again, has proven that it is the top dog on Wall Street, beating analyst estimates across the board even despite much tougher conditions for the banking industry and mixed results from its megabank peers. Important to note, however, that this was one of those better-than-feared situations.

Goldman is still facing incredibly tough year-over-year comparisons. Profit is down 43% to just about-- just above $3.07 billion or $8.25 a share. And net revenue fell 12% to $11.98 billion.

Looking at the individual businesses, you can really see that dent that tougher capital market conditions placed in the results. Investment banking revenue, which is one of its most lucrative-- most lucrative businesses, plunged 57% from a year earlier. And equities traders brought in revenue that was down 14%.

More broadly, however, Goldman trade-- Goldman's trading business did it to some extent help offset some of that dealmaking slowdown that really weighed on the quarter. Trading revenue came in at $6.2 billion, altogether an 11% increase. And that was largely driven by the fixed-income trading business. Another standout here, of course, was the $515 million the bank set aside for potential loan losses that we have seen other banks do this quarter as they prepare for a potential recession.

JULIE HYMAN: It's so interesting to me as well because we got confirmation of the restructuring that was reported on yesterday. And remember when Goldman introduced its big consumer banking stuff, right? Mark came out with Marcus. And it's not going away but it is being sort of folded into another unit and they're doing some restructuring. And I guess maybe the Street likes that stuff, too.

ALEXANDRA SEMENOVA: Yeah, so Marcus didn't turn out the way that David Solomon had hoped that it would. In addition to a reporting results, Goldman also announced a sweeping reorganization. The most significant organizational change in the bank's history, actually. Goldman is streamlining its trading and investment banking divisions, combining them into one unit.

It will now have three main operating segments-- asset and wealth management, global banking, and markets and platform solutions. CEO David Solomon called this the next phase of Goldman's growth. And this comes as the bank looks to get an income boost on its fee-based businesses to help deal with that slowdown that it's seeing in investment banking.

BRAD SMITH: All right.

JULIE HYMAN: OK, thanks so much. Sorry, I thought somebody had some more questions about Goldman Sachs. I guess you did a very comprehensive job. Thanks so much. Appreciate it.