David Solomon, CEO, Goldman Sachs, speaking at the World Economic Forum in Davos, Switzerland, January 23, 2020.
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Goldman Sachs exceeded analysts’ expectations for fourth-quarter earnings and earnings on Tuesday, based on strong performance from the company’s stock traders and investment bankers.
The bank posted earnings of $ 12.08 per share, crushing the estimate of $ 7.47 per share of analysts surveyed by Refinitiv. Revenues of $ 11.74 billion exceeded the estimate by about $ 1.75 billion.
Expectations were rising for Goldman CEO David Solomon. Last week, JPMorgan Chase recorded record trading and consulting results in the fourth quarter, which helped the bank beat profit estimates.
Of the six largest US banks, Goldman derives most of its revenue from Wall Street operations, including banking and investment. In recent years, this has been to the detriment of the company, as retail banking has driven the industry’s record profits.
Now, for the last quarter of the year affected by the coronavirus pandemic, Goldman’s model could prove to be an advantage. Firms with extensive consumer lending operations have been forced to allocate tens of billions of dollars in provisions for sour loans.
But wide-open markets, thanks to unprecedented Federal Reserve action 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 rising demand for IPOs and a record period of debt issuance.
Goldman shares rose 11% in 2020, beating the KBW Bank index by 4.3%.
Here are the numbers:
Earnings: $ 12.08 per share, compared to $ 7.47 per expected share, according to Refinitiv.
Revenue: $ 11.74 billion, compared to an estimated $ 9.9 billion.
This story is developing. Please check again for updates.