The Goldman Sachs Group Inc. weathered the credit market storm much better than many firms, such as rival Bear Stearns Cos Inc., today reporting a 79% surge in third-quarter profit.

Bear Stearns, meanwhile, saw its earnings slide 61% in the same quarter.

Goldman’s net revenues reached US$12.33 billion and net earnings were US$2.85 billion for the quarter ended Aug. 31. Diluted earnings for each common share were US$6.13 vs US$3.26 a year earlier and US$4.93 for the second quarter of 2007.

Goldman’s annualized return on average tangible common shareholders’ equity was 36.6% for the quarter and 37.5% for the first nine months of 2007. Annualized return on average common shareholders’ equity was 31.6% for the quarter and 32% for the latest nine months.

The investment banking division produced record quarterly net revenues of US$2.15 billion, driven by results in financial advisory, which were 64% higher than the previous record. Fixed Income, Currency and Commodities generated record quarterly net revenues of US$4.89 billion, reflecting strength across most businesses. Equities generated record quarterly net revenues of US$3.13 billion, including record commissions.

Additionally, its asset management division generated record management and other fees of US$1.15 billion. Assets under management increased 27% from a year ago to a record US$796 billion, with net inflows of US$50 billion during the quarter. Securities Services achieved record quarterly net revenues of US$762 million, reflecting continued strength in the prime brokerage business.

“Given the difficult environment of the third quarter, many of our businesses were challenged,” said Lloyd Blankfein, chairman and CEO. “But overall, the quality of our franchise produced strong results as clients continue to look to us for advice and execution. The strength of our client relationships, the diversity of our businesses, and the talent and teamwork of our people continue to drive our performance.”

It was a much different story at Bear Stearns, which today reported earnings per share for the third quarter slid 62% from the third quarter of 2006.

Net income for the third quarter US$171.3 million, down 61% from US$438 million a year earlier. Net revenues were US$1.3 billion for the third quarter, down 38% from US$2.1 billion a year before.

The annualized return on common stockholders’ equity for the third quarter of 2007 was 5.3%, and 13.7% for the 12-month period ended Aug. 31. Third-quarter results include about US$200 million in losses and expenses related to the BSAM High-Grade hedge funds.

“The third quarter was characterized by extremely difficult securitization markets and high volatility levels across asset classes. While our fixed-income results clearly reflect these market conditions, we reported solid revenues in investment banking and record revenues in global equities and global clearing services,” said James Cayne, chairman and CEO.

“I am confident in the underlying strength of our business and proud of the effort and determination displayed by our employees during these challenging times.”