Analysis
JPMorgan and Goldman Both Opened Higher on Earnings Day. Neither Kept It
Goldman Sachs earned $17.01 a share, far above forecasts, and opened 3.25% higher; it closed down 0.23%. JPMorgan's adjusted $5.75 missed estimates, yet it also traded up as much as 3% before ending 0.86% lower.
October 13 was the first big day of the third-quarter earnings season, and the two largest US investment banks followed the same path from opposite starting points.
Goldman Sachs had the clearer win. It reported earnings of $17.01 a share, up from $12.25 a year earlier, on net revenue of $18.68 billion and net earnings of $5.29 billion. Estimates had been around $13 a share. The standout was stock trading, where revenue rose 72%. The shares opened at $923.00, 3.25% above Monday's close, and reached $931.00. By the close they were at $891.91, down 0.23%. Coverage of the report noted two softer points: Goldman's CET1 capital ratio fell to 12.4%, and its investment banking backlog shrank from the second quarter.
JPMorgan's numbers were mixed. Net income was $15.3 billion, or $5.57 a share, after a $658 million loss on securities sales; excluding that, earnings were $5.75 a share against roughly $5.92 expected. Managed revenue rose 8% to $50.9 billion. The stock opened 1.70% higher at $339.97 and touched $344.36 before reversing to close at $331.43, down 0.86%, near the bottom of a $331.17-$344.36 range.
The pattern — an early rally that fades into a lower close — is common on results days. The first reaction is driven by the headline numbers; the rest of the session reflects the earnings call, the guidance and the details in the supplementary tables. On October 13, the second reading was the less generous one across the sector: Citigroup fell 5.60%, Wells Fargo 3.10%, and Bank of America and Morgan Stanley, which report on October 14, lost 1.14% and 1.78% ahead of their own numbers.
For anyone following the group, the useful signal is where each stock closed relative to its intraday range. Goldman finished near its open-to-close midpoint after a strong beat; JPMorgan and Citi finished near their lows. That difference usually matters more for the next few sessions than whether a bank technically beat or missed.