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Goldman Sachs Q4 Profit Misses View, But Revenue Beats

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Goldman Sachs Group Inc. (GS) reported a profit for the fourth-quarter that declined 26 percent from last year, reflecting higher operating costs. But, net revenues rose 23% due to higher net revenues in Asset Management and Global Markets.

Quarterly earnings per share missed analysts' expectations, while revenues beat their estimates.

Net earnings applicable to common shareholders for the fourth-quarter decreased 26 percent to $1.72 billion from last year's $2.32 billion, with earnings per share declining to $4.69 from $6.04 in the prior year. Analysts polled by Thomson Reuters expected the company to report earnings of $5.46 per share for the fourth-quarter. Analysts' estimates typically exclude special items.

Provision for credit losses was $336 million for the fourth quarter of 2019, 51% higher than the fourth quarter of 2018. The increase compared with the fourth quarter of 2018 primarily reflected higher impairments.

Operating expenses were $7.30 billion for the fourth quarter of 2019, 42% higher than the fourth quarter of 2018, due to higher compensation and benefits expenses and net provisions for litigation and regulatory proceedings.

Net revenues for the fourth quarter of 2019 were $9.96 billion, up 23% from the prior year's $8.08 billion, reflecting higher net revenues in Asset Management and Global Markets. Analysts expected revenues of $8.51 billion for the quarter.

The company declared a dividend of $1.25 per common share to be paid on March 30, 2020 to common shareholders of record on March 2, 2020.

Net revenues in Investment Banking were $2.06 billion for the fourth quarter of 2019, 6% lower than last year.

Quarterly net revenues in Global Markets were $3.48 billion, 33% higher than the prior year.

Net revenues in Asset Management for the quarter were $3.00 billion, 52% higher than the previous year.

Net revenues in Consumer & Wealth Management were $1.41 billion, up 8% from the prior year.

Earlier this month, Goldman Sachs said it reorganized its business segments, starting with the fourth quarter of 2019.

The bank said it called its four business segments as Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management. Previously, it was called as Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management.

In Wednesday pre-market trade, GS is trading at $244.00, down $1.63 or 0.66 percent.

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