NEW YORK (AP) — Goldman Sachs Group Inc.'s third-quarter earnings more than tripled from the depths of the financial crisis as income from the company's trading operations offset a drop in its investment banking business.

Goldman's stock fell 2.5 percent yesterday as investors reacted to the slide in investment banking revenue, the result of a general slowdown in takeover activity. Shares fell $4.71 to $187.57 in afternoon trading.

Some profit taking after the better-than-expected results also sent the stock falling, analysts said.

Goldman earned $3.03 billion, or $5.25 per share, easily beating analysts' expectations for a profit of $4.24 per share. The bank earned $810 million, or $1.81 per share during its fiscal third quarter last year, which ended in August. During the peak of the credit crisis last fall, Goldman became a bank holding company and changed to calendar quarterly reporting periods.

Goldman also had $5.35 billion in compensation expenses during this July-September period.

The company said bond, commodities and currency trading buoyed its profits for the second straight quarter.

"They're just good traders," said David Easthope, a senior analyst at consulting firm Celent. Trading and investment revenue nearly quadrupled from the third quarter last year and dipped seven percent from record results in the second quarter.

But investment banking revenue, considered the foundation of the company's business, fell to $899 million in the third quarter. The results were 31 percent worse than the similar quarter last year as the credit crisis was worsening and 38 percent worse than the most recent quarter.

Goldman attributed the drop to a decline in bond underwriting as the still troubled credit markets limited the amount that companies could borrow to complete deals. The weakness in Goldman's core business might have given investors pause, analysts said.

"Most people attach greater value to (investment banking) because its a fee-driven business," said John Jay, a senior analyst at financial consulting firm Aite Group.

Goldman, like other Wall Street banks, makes its money in investment banking by charging fees to underwrite bond sales or stock offers, or to manage mergers and acquisitions. Analysts like to see strength in that division because it is usually the most stable source of money for a Wall Street bank when the economy is strong.

It also is considered less risky than operations like trading, which are prone to wild market swings, and can cost a bank big if they make the wrong bets.

The investment banking business would have fared even worse were it not for strong stock underwriting activity. As the stock market has rebounded, Goldman was able to leverage its strong reputation to help companies issue new shares to take advantage of the rising market.

Lloyd Blankfein, the company's chairman and CEO, said : "Although the world continues to face serious economic challenges, we are seeing improving conditions and evidence of stabilisation, even growth, across a number of sectors."