Goldman Sachs Group Inc.’s said Tuesday its fourth-quarter profit rose by 58% and beat analysts’ reduced expectations as it capped off a difficult year of slack deal-making and restructuring.
Goldman Sachs
GS,
stock rose 1.8% even as the financial sector moved into the red.
KBW analyst David Konrad reiterated an outperform rating on Goldman Sachs and said the bank’s results were driven by its banking and asset management units. The bank beat his estimate for pre-provision net revenue, which more than offset higher-than-expected expenses.
While Goldman Sachs’s fourth-quarter revenue fell in its global banking and markets unit as deal-making faltered, it rose in its asset and wealth management unit as well as its platform solutions business, which includes transaction banking, business partnerships and its digital platform for managing exchange-traded funds.
Chief Executive David Solomon said 2023 marked a “year of execution” at the firm, as it refocused on its core investment banking and wealth advisory businesses and pulled back from its consumer-banking business.
Goldman Sachs shed 7% of its work force during the year, but reported a relatively small head count reduction of 600 people during the fourth quarter to bring its total staff to 45,300 as of Dec. 31. The bank has 3,200 fewer employees than it did a year ago.
Goldman Sachs
GS,
said its net income for the three months ended Dec. 31 rose to $1.87 billion, or $5.48 a share, from $1.19 billion, or $3.32 a share, in the year-ago quarter.
Wall Street analysts estimated the marquee investment bank would earn $3.62 a share in the fourth quarter, which was trimmed from $6.67 a share at the start of the quarter, according to FactSet data.
Revenue for the fourth quarter rose to $11.32 billion from $10.59 billion, well ahead of the analyst estimate of $10.8 billion.
Fourth-quarter asset and wealth management revenue rose by 23% to $4.39 billion. Platform solutions revenue increased by 12% to $577 million. Global banking and markets revenue dropped 3% to $6.35 billion.
For 2023, Goldman’s profit fell to $7.91 billion from $10.76 billion in 2022. Total net revenue dropped to $46.25 billion for the year, down from $47.37 billion for full-year 2022.
The stock, which is a component of the Dow Jones Industrial Average
DJIA,
has risen 9.2% over the same period.
Moody’a analyst David Fanger said Goldman Sachs “benefitted significantly” from cost-saving efforts, while growth in non-compensation expense slowed significantly excluding the FDIC special assessment cost.
Goldman Sachs follows earnings updates from five other of the U.S.’s largest banks including Bank of America Corp., JPMorgan Chase & Co. Citigroup and Wells Fargo & Co., all on Friday.
Morgan Stanley reported its profit on Tuesday.
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