sunny.png
Wednesday October 16th, 2019 6:14PM

Goldman's 4Q profits beat estimates, despite trading worries

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — Investment bank Goldman Sachs swung to a fourth-quarter profit, as the bank's advisory business helped offset a difficult quarter in trading, given the turbulent markets in late 2018.

The Wall Street firm said Wednesday that it earned $2.32 billion, or $6.04 a share, compared to a $2.14 billion loss in the same period a year ago. Like other banks, Goldman Sachs had to make an accounting adjustment to its books after the passage of the 2017 tax law, which required banks to write off billions of dollars in what are known as tax-deferred assets.

The loss that Goldman reported in the fourth quarter 2017 was at the time the first quarterly loss the bank reported in six years.

Goldman's results beat analysts' expectations for earnings of $4.30 a share, according to FactSet.

Expectations for Goldman's results were low this quarter. Goldman has a large trading business, which specializes in trading currencies, commodities and bonds. All three of those assets were extremely volatile in the last months of 2018, and other banks had posted drops or warned to expect declines in their trading revenues.

The results in Goldman's trading business, while not great, were better than expected. Goldman's fixed income, commodities and currencies division reported an 18 percent drop in revenues in the quarter to $822 million, which was a worse performance compared to JPMorgan Chase and Citi, who reported their results earlier this week. It was one of the worst quarterly performances for Goldman's fixed income trading business in years.

Meanwhile the bank saw revenue growth in its stock trading, reporting equities revenue of $1.6 billion compared with $1.37 billion a year earlier.

Goldman was able to make up for the poor performance in trading through its advisory business, where it helps companies and individuals buy and sell businesses. Advisory fee revenues were $1.2 billion in the quarter, up 56 percent from a year earlier. Underwriting revenues were down, however, as fewer companies went public or sold stock in the fourth quarter given the volatile markets.

Total investment banking revenues were $2.04 billion in the quarter, down from $2.14 billion a year earlier.

Goldman is currently in a transition phase, with the recent retirement of long-time chief executive officer Lloyd Blankfein last year. David Solomon took over for Blankfein, and is looking to transition Goldman away from the volatile swings markets can bring.

The bank set aside $12.33 billion last year to pay its well-compensated employees, coming to a median pay of $336,885 for each of its 36,600 employees.

Goldman Sachs shares were up 3.5 percent in premarket trading to $186.20.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Business - Industries, AP Business - Financial Services
© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Goldman's 4Q profits beat estimates, despite trading worries
Goldman Sachs posts 4Q profit that beats forecasts, helped by better-than-expected bond and stock trading
9:13AM ( 6 minutes ago )
Zimbabwe police arrest prominent government critic
Zimbabwe police arrest prominent government critic as crackdown grows over fuel price protests
9:02AM ( 18 minutes ago )
The Latest: Muslim leaders condemn deadly Kenya attack
The Latest: Muslim leaders condemn deadly Kenya attack, shun attempts to 'divide the country'
8:56AM ( 23 minutes ago )
Associated Press (AP)
The Latest: UK Parliament debates no-confidence motion
British lawmakers have begun debating a motion of no-confidence in Prime Minister Theresa May's government..
8:36AM ( 44 minutes ago )
World's permafrost gets warmer; Siberia rises the most
Scientists say permafrost measurements around the world show it has warmed by an average of 0.3 degrees Celsius (0.54 Fahrenheit) over a decade
8:31AM ( 49 minutes ago )
Sears staves off liquidation, stores to remain open
Sears avoids liquidation after 11th-hour negotiations buy more time for the 132-year-old department store
8:26AM ( 54 minutes ago )
AP Business
Bank of America 4Q profits jump on higher interest rates
Bank of America's fourth quarter profits rise by 39 percent on an adjusted basis, helped by last year's steady rise in interest rates as well as a lower tax rate
7:39AM ( 1 hour ago )
Bank of America profits jump on higher interest rates
Bank of America's fourth quarter profits rise by 39 percent on an adjusted basis, helped by last year's steady rise in interest rates as well as a lower tax rate
7:19AM ( 2 hours ago )
Senators consider former lobbyist as EPA's permanent chief
Acting Environmental Protection Agency chief Andrew Wheeler's past lobbying work for coal companies and other industries regulated by the agency is expected to draw scrutiny Wednesday when a Senate committee considers his nomination to the post full time
1:07AM ( 8 hours ago )
AP Business - Corporate News
Ivanka Trump to work on World Bank president search
The White House says Ivanka Trump will take part in the nomination process for a new head of the World Bank
5:40PM ( 15 hours ago )
US indexes hit one-month highs as tech stocks rally
Stocks are trading at their highest levels in a month, led by Netflix and other technology and internet companies as well as health care companies
3:01PM ( 18 hours ago )
Zimbabwe military quells fuel price hike protests; 8 killed
Military deploys, fires tear gas on 2nd day of Zimbabwe fuel hike protests; 8 killed says rights group
12:59PM ( 20 hours ago )
AP Business - Industries
China to cut taxes, keep policy flexible to counter slowdown
China to cut taxes, keep policy flexible to counter slowdown
1:57AM ( 1 day ago )
Former US Interior boss takes job at investment company
Former U.S. Interior Secretary Ryan Zinke has taken a job at an investment company after leaving the Trump administration amid unresolved ethics investigations
8:45PM ( 1 day ago )
Fed officials feared adverse market reaction in 2013
Transcripts: Federal Reserve officials feared adverse market reaction to bond tapering in 2013
5:16PM ( 4 days ago )
AP Business - Financial Services
Zimbabwe police arrest prominent government critic
Zimbabwe police arrest prominent government critic as crackdown grows over fuel price protests
9:02AM ( 18 minutes ago )
The Latest: Muslim leaders condemn deadly Kenya attack
The Latest: Muslim leaders condemn deadly Kenya attack, shun attempts to 'divide the country'
8:56AM ( 23 minutes ago )
Prosecutor: Drug maker pushed OxyContin despite danger signs
Massachusetts court filing says company that makes opioid sought 'blizzard of prescriptions' when it launched the drug in the 1990s
8:55AM ( 25 minutes ago )
Famed Naples pizzeria latest target of bombs linked to mob
A popular pizzeria is the latest target of bombings in the Naples area
8:54AM ( 26 minutes ago )
Barr seeks to assure senators he won't be a Trump loyalist
Questioned by Senate, Barr tries to assure Democrats that he won't be a Trump loyalist as attorney general
8:45AM ( 34 minutes ago )