David Solomon, executive director of Goldman Sachs & Co., speaks during an interview with Bloomberg Television at the Milken Institute Global Conference in Beverly Hills, California, USA, on Monday, April 29, 2019.
Patrick T. Fallon | Bloomberg | Getty Images
Goldman Sachs on Tuesday exceeded analysts’ expectations for fourth-quarter earnings and revenue, with the strong performance of the company’s stock brokers and investment bankers.
The bank posted earnings of $ 12.08 per share, crushing the estimate of $ 7.47 per share from analysts polled by Refinitiv. The $ 11.74 billion revenue exceeded the estimate by about $ 1.75 billion.
Expectations were high for Goldman CEO David Solomon. Last week, JPMorgan Chase released record fourth-quarter trading and consulting results that helped the bank beat its earnings estimates.
Of the six largest American banks, Goldman derives most of its revenue from Wall Street activities, including trading and investment banking. In recent years, this has been a loss for the company, as the retail bank has boosted record sector profits.
Now, during the last quarter of a year marked by the coronavirus pandemic, Goldman’s model may be an advantage. Companies with extensive consumer credit operations have been forced to set aside tens of billions of dollars in provisions for non-performing loans.
But open markets, thanks to the Federal Reserve’s unprecedented actions earlier this year, are expected to help usher in the best year for Wall Street trading since the financial crisis. Meanwhile, investment bankers are benefiting from increased demand for IPOs and a record wave of debt issuance.
Goldman’s shares rose 11% in 2020, outpacing the 4.3% drop in the KBW Bank Index.
Here are the numbers:
Earnings: $ 12.08 per share, against $ 7.47 per share expected, according to Refinitiv.
Revenue: $ 11.74 billion, against an estimated $ 9.9 billion.
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