Goldman Sachs beats despite trading woes

Goldman Sachs’ chairman and CEO, Lloyd Blankfein, at the Bloomberg Global Business Forum in New York.Thomson Reuters

Goldman Sachs on Wednesday released results from its fourth quarter, beating analyst expectations with adjusted earnings of $5.68 a share.

Wall Street analysts had been expecting adjusted earnings of $4.90 a share.

Like the other big banks, Goldman Sachs took a hit from the recently enacted tax law. The bank took a hit of $4.40 billion in the fourth quarter related to the tax legislation.

JPMorgan reported a $2.4 billion fourth-quarter loss because of the new tax law, and Citigroup reported a $22 billion loss. The CEOs of each firm nonetheless praised the potential long-term benefits of the law.

Here are the key numbers:

• Revenue of $7.83 billion, ahead of $7.6 billion expected.
• The bank hauled in $2.14 billion in investment-banking revenue in the fourth quarter, up 44% year-on-year and 19% quarter-on-quarter. The bank said its dealmaking backlog increased compared with that of the third quarter.
• The Institutional Client Services group, which houses equity and fixed-income trading, posted $2.37 billion in revenue for the fourth quarter, down more than a third year-over-year and 24% from the third quarter.
• The bank said both the equities and fixed-income units "continued to operate in a challenging environment characterized by low levels of volatility and low client activity."
• Both the investment and lending business and the asset-management business posted increases in revenue, with the two units delivering $1.66 billion in revenue each.
• Nonadjusted net income showed a loss of $2.14 billion, a smaller loss than the $2.35 billion loss expected.

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