Goldman Sachs it reported sharply lower-than-expected profits for the fourth quarter, hurt by a sharp slowdown in investment banking and wealth management revenues.
The US giant said its quarterly profit was 1.33 billion dollars, down by 66% compared to a year ago. Earnings per share for the fourth quarter were at 3,32 dollars below expectations of $5.56 per share expected by FactSet.
Also, the bank headed by David Solomon recorded revenues equal to 10.59 billion dollars, down by 16% compared to the previous year, also below analysts’ estimates 10.83 billion of dollars.
The stock yields more than 3,0% a $362 per share in Wall Street pre-market following earnings. While Morgan Stanley is accelerating upwards (+3.7%) a 95 dollars per share in pre-market following reports above analyst expectations, in part thanks to the division’s record earnings wealth management.
Goldman Sachs: quarter worse than expected, possible further workforce cuts
“Analyst expectations for Goldman Sachs’ fourth quarter were already dire, but fourth quarter results were even more miserable than expected,” he said. Octavio Marenzi, CEO of Wall Street Opimas, in a note. “Revenues broadly in line with forecasts, but earnings took a hit. The real problem is that operating expenses have increased by 11%, while revenues have plummeted”.
Those numbers could lead to more cost cuts and layoffs within Goldman Sachs, Marenzi said.
The fourth quarter was bad for Wall Street’s banking industry, Goldman Sachs’ rivals, JPMorgan e Citigroup experienced a decline in revenues dell’investment banking of almost the 60% according to last week’s numbers.
Analysts are awaiting Solomon’s call in which he will take stock of the company’s headcount and expenses after the bank fired 3.200 employees last week.