Goldman Sachs reported a third-quarter loss of $393 million on Tuesday, marking only the second time the investment bank has had an unprofitable quarter since going public in 1999.
The bank's diluted loss per common share was $0.84, while its return on equity was 3.7 percent, down from 10.3 percent in the previous year. Analysts had predicted a loss of 16 cents per share, according to Reuters.
Goldman's Investing & Lending division had losses of $2.48 billion, which included a $1.05 billion loss for shares of Industrial and Commercial Bank of China Limited. Its investment banking revenue was $781 million, down 33 percent from the previous year. Fixed income, currency and commodities client trading profits were $1.31, down 26 percent from $2.687 billion in the previous year
Last year, Goldman had a $1.7 billion profit in the third quarter. The bank's only previous loss came in the wake of the collapse of Lehman Brothers, when it lost $2.12 billion in the fourth quarter of 2008.
"CEO and investor confidence as well as asset prices across markets were lower in the third quarter given the uncertain macroeconomic and market conditions. Our results were significantly impacted by the environment and we were disappointed to record a loss in the quarter," said Lloyd Blankfein, chairman and CEO, in a statement. "However, we believe the strength of both our client franchise and our balance sheet positions us well for when economies and markets improve."
Earlier this year, the bank said it would seek to cut costs by $1.45 billion, which would involve layoffs of around 3,000 employees. The company said operating expenses were $4.32 billion in the third quarter, down 24 percent from the previous quarter. Salaries in the third quarter totaled $1.58 billion, a 59 percent decline from the previous year.
The bank will be holding a conference call at 9:30 EST on Tuesday to discuss the earnings.