Goldman surprised investors, earning $3.19 billion in the third quarter, "powered by strong trading and gains on its own corporate investments" as the New York Times put it. But Rochdale Analyst Richard Bove struck a more skeptical tone on the earnigns report--although he does have "buy" on the stock, saying business in 2010 will likely improve. In a research note this morning, Bove wrote, "On an operating basis, Goldman did not have a good quarter. Its investment banking business fell by 38% sequentially and 31% year-over-year. All parts of of the business, financial advisory (down 12% sequentially and 47% YOY), equity underwriting (down 51% and 24% YOY, and debt underwriting (down 37% and 45%)."
He reckons that business in all three business categories will show "much higher levels of activity" in the fourth quarter and 2010.