Goldman Sachs Group Inc. (The) (NYSE: GS) posted better-than-expected fourth-quarter earnings on Wednesday as revenue from trading surged in the quarter.
The Wall Street giant said net income was $2.35 billion, or $5.08 a share, in the quarter end December, compared with $765 million, or $1.27 per share, a year earlier. Excluding certain items, the company earned $5.48 per share, topping the average analyst estimate of $4.82 polled by Thomson Reuters.
Net revenue in the fourth quarter rose 12 percent to $8.17 billion, boosted by a surge in trading revenue. Analysts had projected revenue to be $7.76 in the quarter. Fixed-income trading revenue jumped 78.3 percent to $2 billion, beating analysts’ estimate of $1.59 billion. Revenue from investment banking declined 3.9 percent to $1.49 billion while revenue from investment management rose 3.4 percent to $1.63 billion.
"After a challenging first half, the firm performed well for the remainder of the year as the operating environment improved," chairman and CEO Lloyd C. Blankfein said in a statement. "We continued to manage our expenses carefully and we enter the new year with industry leading positions across our businesses, as well as strong capital and liquidity."
The better-than-expected results was also due to lower operating expenses. Operating expenses dropped 23 percent to $4.77 billion, the lowest level since 2008. The New York-based company had cut about 6.5 percent of its workforce during the year.