Goldman Sachs just had a blowout 4th quarter thanks to its investing business

GettyDavid Solomon has now reported his first results as CEO.
  • Goldman Sachs handily beat earnings and revenue expectations during the fourth quarter.

Goldman Sachs announced fourth-quarter results Wednesday morning and handily beat earnings expectations. The bank posted earnings of $US6.04 a share, compared with analyst expectations of $US4.53 a share, in the first quarter of results for the firm’s new CEO, David Solomon.

Here are the key numbers:

  • Revenue: $US8.1 billion, down 1% from last year and beating expectations for $US7.5 billion.
  • Net income: $US2.5 billion, compared with a $US1.9 billion loss in last year’s fourth quarter driven by changes in the tax code. Excluding the effect of taxes, last year’s results were an adjusted $US2.3 billion, according to Bloomberg data.
  • Return on equity: 13.3% for the year.
  • Institutional client services: Revenue from sales and trading activities rose 2% to $US2.4 billion. Equities rose 17% to $US1.6 billion, while fixed-income, currencies, and commodities revenue fell 18% to $US822 million. The total and fixed-income results beat KBW estimates.
  • Investment banking: Revenue fell 5% to $US2 billion, as both equity and debt underwriting slumped from the prior year. The bank collected $US1.2 billion from advisory fees, surpassing KBW estimates.
  • Investment management: Revenue rose 2% to $US1.7 billion, missing KBW analysts’ prediction for $US1.8 billion in revenue.
  • Investing & Lending segment: Revenue fell 2% to $US1.9 billion but surpassed the $US1.4 billion prediction of KBW analysts.

“We are pleased with our performance for the year, achieving stronger top- and bottom-line results despite a challenging backdrop for our market-making businesses in the second half,” Solomon said in the statement. “We are confident that we are well positioned to support an even larger universe of clients, continue to diversify our revenue mix, and deliver strong returns for our shareholders in the years ahead.”

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