David Solomon, CEO of Goldman Sachs & Co., speaks on Monday, April 29, 2019 during an interview with Bloomberg Television during the Milken Institute Global Conference in Beverly Hills, California, USA.
Patrick T. Fallon | Bloomberg | Getty Images
Goldman Sachs on Tuesday beat analysts’ expectations for fourth-quarter earnings and earnings for strong performance from the firm’s stock traders and investment bankers.
The bank earned $ 12.08 per share, raising the $ 7.47 per share estimate of analysts surveyed by Refinitiv. Revenue of $ 11.74 billion exceeded the estimate by approximately $ 1.75 billion.
Expectations were high for Goldman CEO David Solomon. Last week, JPMorgan Chase traded record results for the fourth quarter, providing advice that helped the bank beat profit estimates.
Of the six largest U.S. banks, Goldman derives most of its revenue from Wall Street activities, including commercial and investment banking services. Over the past few years, this has been a disadvantage for the business, as retail banking has the record profits of the industry.
For the last quarter of a year affected by the coronavirus pandemic, Goldman’s model could potentially be an advantage. Companies with large consumer lending operations were forced to set aside tens of billions of dollars to provide for acidified loans.
But after wide-open markets, thanks to the unprecedented actions of the Federal Reserve earlier this year, it is expected to usher in the best year for trading on Wall Street since the financial crisis. Meanwhile, investment bankers are benefiting from rising demand for IPOs and a record issuance of debt.
Goldman shares rose by 11% in 2020, causing the 4.3% decline in the KBW Bank index.
Here are the numbers:
Earnings: $ 12.08 per share, versus $ 7.47 per share, according to Refinitiv.
Revenue: $ 11.74 billion, compared to $ 9.9 billion.
This story unfolds. Please come and check for updates.