Goldmans profits fall 58% but beat expectations
Goldman Sachs has reported a 58% drop in net income for the fourth quarter of 2011 but its share price looks set to open higher after the figures beat analyst expectations.
Goldmans’ fourth quarter net income fell to $1.01bn, down from $2.39bn for the comparable period in 2011. Earnings of $1.84 per share were ahead of the average estimate of $1.23.
Net revenues in the investment banking unit for the fourth quarter fell 43% year on year to $857m.
Over the year as a whole, net revenues across the company fell from $39.2bn to $28.8bn, a drop of 26%. Net earnings fell 47% to $4.4bn.
“This past year was dominated by global macroeconomic concerns which significantly affected our clients’ risk tolerance and willingness to transact,” said Goldman CEO and chairman Lloyd Blankfein.
Other big US banks have also reported falling revenues this quarter after their investment banking units suffered during last year’s market upheaval.
Citigroup reported an 11% decline in fourth quarter net income last week, while Q4 earnings at J. P. Morgan fell 23%.
Goldman shares were up 1.8% to $98.45 in pre-market trading following the earnings announcement.
This article was first published on Investment Week