Global investment banking leader Goldman Sachs (GS Free Goldman Sachs Stock Report) reported third-quarter revenue and share-net results that were above our estimates, showing strong year-over-year improvement.

Revenues of $11.007 billion were higher our earlier call of $10.8 billion, and marked a noteworthy increase over the $9.943 billion figure that the company posted in the prior-year period. Meantime, earnings per share of $5.02 were just a few pennies ahead of our forecast of $5.00, and just a notch above the $4.88 tally that was recorded in the third quarter of last year.

Performance varied substantially by operating segment. The Institutional Client Services unit, which is the company's largest by revenue, saw a top-line decline of 17% from the September-period of last year. The bulk of the decrease was due to significantly lower revenues in commodities, interest rate products, and credit offerings. On the other hand, the Investment Banking segment saw a 17% increase, driven by a 38% surge in financial advisory revenues, due to a jump in completed mergers and acquisitions. Meanwhile, the Investing & Lending segment grew 35%, year over year, on a 51% expansion in equity securities revenues, reflecting an increase in net gains from investments in private equities.

In the coming months, we expect policy factors to be in the spotlight. Congress and the White House are working on a bill to reform the tax code, with a specific focus on cutting the corporate tax rate. This would likely be bullish for Goldman Sachs. In addition, President Trump is due to announce a nominee for Chair of the Federal Reserve in the coming weeks. The outcome will be of particular interest to Goldman Sachs, as some of the top candidates have more relaxed view on financial regulation than the current Chair, Janet Yellen, who also remains a contender for the job.

We have raised our full-year 2017 revenue estimate from $42.5 billion to $42.7 billion, and left our share net estimate unchanged at $19.50.

About The CompanyThe Goldman Sachs Group is a global investment banking and securities firm. It operates in four business segments: Investment Banking (21% of 2016 revenues); Institutional Client Services (47%); Investing & Lending (13%); and Investment Management (19%). In 2016, 40% of the company’s revenues came from outside of the Americas.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.