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Goldman Sachs Q4 Adj. Profit, Revenues Beat View

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Goldman Sachs Group Inc. (GS) on Wednesday reported a loss for the fourth quarter, reflecting lower trading revenue in fixed income, currencies and commodities as well as a charge related to the recent U.S. tax reform.

However, both adjusted earnings per share and revenues for the quarter topped analysts' expectations. The company's shares are losing almost 1 percent in pre-market activity.

Goldman Sachs said in late December that the new tax law signed by U.S. President Donald Trump will reduce its earnings for the fourth quarter and year ending December 31, 2017 by about $5 billion.

Fourth-quarter net loss applicable to the company's common shareholders were $2.14 billion or $5.51 per share, compared to net income of $2.15 billion or $5.08 per share in the year-ago period.

During the latest quarter, Goldman Sachs recorded $4.40 billion of income tax expense related to the Tax Legislation. Excluding the tax legislation, adjusted earnings for the quarter were $5.68 per share.

On average, twenty analysts polled by Thomson Reuters expected the company to report earnings of $4.92 per share. Analysts' estimates typically exclude special items.

Net revenues decreased 4 percent to $7.83 billion from $8.17 billion in the prior year. Wall Street expected revenues of $7.61 billion.

Net revenues in Investment Management rose 4 percent from last year to $1.66 billion, primarily due to higher management and other fees, reflecting higher average assets under supervision. This was partially offset by lower incentive fees.

Meanwhile, net revenues in Institutional Client Services fell 34 percent from the year-ago period to $2.37 billion.

Of this, net revenues in Fixed Income, Currency and Commodities Client Execution or FICC were $1.00 billion, 50 percent lower than the year-ago quarter, which included more favorable market conditions. The decrease was due to significantly lower net revenues in currencies, credit products, interest rate products and commodities.

Net revenues in Investing & Lending increased 12 percent from the year-ago quarter to $1.66 billion, while Investment Banking revenues grew 44 percent to $2.14 billion.

On January 16, 2018, Goldman Sachs' board of directors declared a dividend of $0.75 per common share to be paid on March 29, 2018 to common shareholders of record on March 1, 2018.

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