Financial services firm Goldman Sachs Group, Inc. (GS: Quote) reported Wednesday profit for the fourth quarter that nearly tripled from last year, reflecting strong revenue growth amid sharp gains across its operating segments. Both earnings per share and quarterly revenues significantly topped analysts’ expectations.
“While economic conditions remained challenging for much of last year, the strengths of our business model and client franchise, coupled with our focus on disciplined management, delivered solid performance for our shareholders,” Chairman and CEO Lloyd Blankfein said.
The New York-based global investment bank reported net earnings applicable to common shareholders of $2.83 billion or $5.60 per share for the fourth quarter, sharply higher than $978 million or $1.84 per share in the prior-year quarter, and also sharply higher than $1.46 billion or $2.85 per share in the fourth quarter. Net earnings surged to $2.89 billion from $1.01 billion a year ago.
On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $3.78 per share for the fourth quarter. Analysts’ estimates typically exclude special items.
Goldman Sachs’ quarterly net revenues, including net interest income, surged 53 percent to $9.24 billion from $6.05 billion in the same quarter last year, and topped nineteen Wall Street analysts’ consensus estimate of $7.91 billion. In the third quarter, the company reported net revenues of $8.35 billion.
Total non-interest revenues surged 66 percent to $8.26 billion, while net interest income dropped 9 percent to $973 million from a year ago.
The company’s investment banking business posted a 64 percent growth in net revenues to $1.41 billion, with significantly higher debt underwriting revenues.
Net revenues in institutional client services were up 42 percent to $4.34 billion, with 50 percent growth in fixed income, currency and commodities revenues, and doubling of security services revenues.
Net revenues in investing & lending were $1.97 billion, up 126 percent from last year, primarily helped by the doubling of gains on the company’s investment in Industrial and Commercial Bank of China Ltd., and sharply higher debt securities and loans revenues.
Investment Management revenues increased 20 percent to $1.52 billion, reflecting higher incentive fees, while transaction revenues declined slightly.
The company’s annualized return on average common shareholders’ equity or ROE was 16.5 percent for the fourth quarter.
Goldman also declared a dividend of $0.50 per common share, payable on March 28 to common shareholders of record on February 28, 2013.
For fiscal 2012, the company reported net earnings applicable to common shareholders of $7.29 billion or $14.13 per share, sharply higher than $2.51 billion or $4.51 per share in the prior year.
Net revenues, including net interest income, for the full year grew 19 percent to $34.16 billion from $28.81 billion last year.
Street was looking for full-year 2012 earnings of $12.20 per share on annual revenues of $32.64 billion.
Goldman Sachs’ peer JPMorgan Chase & Co. (JPM: Quote), the second largest U.S. bank by assets, reported earlier in the day a 53 percent rise in fourth-quarter profit from last year, driven by higher net revenue and lower loan loss provisions. Total net revenues grew 10 percent to $23.65 billion from $21.47 billion in the previous year.
GS closed Tuesday’s regular trading session at $135.59, up $0.04 on a volume of 4.32 million shares. In the past 52-week period, the stock has been trading in a range of $90.43 to $138.15.
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by RTT Staff Writer
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