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Goldman Sachs Q4 Profit Down 13%, Misses Estimates

goldman july17 18jan22 lt

Goldman Sachs Group Inc. (GS) reported Tuesday that profit for the fourth quarter declined 13 percent from last year, reflecting an 8 percent drop in net revenues, higher operating expenses and higher provisions for bad loans. Earnings for the quarter missed analysts' expectations, but quarterly revenues topped it.

In Tuesday pre-market trading, GS is currently trading at $365.79, down $15.15 or 3.98 percent.

For the quarter, net earnings applicable to common shareholders declined to $3.81 billion or $10.81 per share from $4.36 billion or $12.08 per share in the prior-year quarter.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $11.76 per share for the quarter. Analysts' estimates typically exclude special items.

Provision for credit losses for the quarter was $344 million, compared to $293 million last year, primarily reflected growth in credit card balances.

Operating expenses were $7.27 billion for the fourth quarter, 23 percent higher than last year, reflecting significantly higher compensation and benefits expenses, professional fees and net provisions for litigation and regulatory proceedings. In addition, technology expenses, transaction based expenses and market development expenses were all higher.

Net revenues for the quarter grew 8 percent to $12.64 billion from $11.74 billion in the same quarter last year, reflecting significantly higher net revenues in Investment Banking and Consumer & Wealth Management, partially offset by lower net revenues in Asset Management and Global Markets. Analysts expected revenue of $12.08 billion for the quarter.

Quarterly net revenues in Investment Banking were $3.80 billion, 48 percent higher than last year, reflecting significantly higher net revenues in underwriting, financial advisory and corporate lending.

Net revenues in Global Markets were $3.99 billion for the fourth quarter, down 7 percent from the previous year, primarily due to 11 percent lower revenues in equities.

Net revenues in Asset Management were $2.89 billion for the fourth quarter, 10 percent lower than the prior year, reflecting significantly lower net revenues in Equity investments as well as Lending and debt investments, partially offset by higher Incentive fees.

Net revenues in Consumer & Wealth Management were $1.97 billion, 19 percent higher than last year.

On January 14, 2022, the Board of Directors of Goldman Sachs declared a dividend of $2.00 per common share to be paid on March 30, 2022 to common shareholders of record on March 2, 2022.

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