David Solomon, CEO, Goldman Sachs, speaks at the World Economic Forum in Davos, Switzerland, January 23, 2020.
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Goldman Sachs beat analyst expectations for fourth-quarter earnings and revenue on Tuesday thanks to strong performance from the company’s stock traders and investment bankers.
The bank posted a profit 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 high for David Solomon, CEO of Goldman. Last week, JPMorgan Chase posted record fourth-quarter trading and advisory results that helped the bank beat earnings expectations.
Of the six largest US banks, Goldman derives most of its income from Wall Street activities, including trading and investment banking. That has been a detriment to the company in recent years as retail banking has boosted the industry’s record profits.
Now, for the last quarter of a year marred by the coronavirus pandemic, Goldman’s model may prove to be an advantage. Companies with sizeable consumer lending were forced to set aside tens of billions of dollars in commissions for soured loans.
But wide open markets, thanks to the Federal Reserve’s unprecedented moves earlier this year, are expected to help usher in the best trading year on Wall Street since the financial crisis. Meanwhile, investment bankers are benefiting from rising demand for IPOs and a record flow of debt issuance.
The Goldman share rose by 11% in 2020, surpassing the 4.3% decline in the KBW Bank Index.
Here are the numbers:
Earnings: $ 12.08 per share, versus $ 7.47 per expected share, according to Refinitiv.
Revenue: $ 11.74 billion, estimated against $ 9.9 billion.
This story develops. Please check again for updates.