Goldman Sachs released its fourth quarter earnings report before opening bell this morning, posting earnings of $1.27 per share and revenue of $7.27 billion. Analysts had been expecting earnings of $3.54 per share and $7.09 billion in revenue for the quarter. In last year’s fourth quarter, the firm reported revenue of $7.69 billion and earnings of $4.38 per share.
Goldman Sachs said its earnings result includes a charge of $3.41 per share in connection with the $1.8 billion settlement with the RMBS Working Group.
Goldman Sachs sees solid results across most segments
The firm’s Investment Banking segment recorded $1.55 billion in net revenues for the fourth quarter, marking a 7% year over year increase and flat with the third quarter. The Financial Advisory unit’s revenue climbed 27% year over year to $879 million on the back of higher U.S. client activity. Underwriting saw an 11% decline in net revenues to $668 million as a result of much lower client activity, resulting in much lower net revenues for the unit. Higher debt underwriting revenues partially offset the decline.
Goldman Sachs’ Institutional Client Services business saw revenues fall 9% year over year to $2.88 billion, including $1.12 billion in Fixed Income, Currency and Commodities Client Execution and $1.76 billion in Equities. The Investing and Lending arm’s revenues tumbled 15% year over year to $1.3 billion, mostly as a result of lower revenues from equity investments.
The firm’s Investment Management unit recorded $1.55 billion in revenue, which was about flat with the fourth quarter of 2014. Management and other fees were flat year over year as changes in asset mix under supervision offset an increase in average assets under supervision. Total assets under supervision climbed to $1.25 trillion during the fourth quarter. Long-term assets under supervision rose $16 billion with $9 billion in net inflows.
Updated capital ratios
Goldman Sachs said its Standardized Common Equity Tier 1 ratio was 13.6% as of the end of December, marking an improvement from 11.3% at the end of December 2014. The Basel III Advanced Common Equity Tier 1 ratio improved slightly from 12.2% a year ago to 12.4% as of the end of December. Book value per common share and tangible book value per share each rose 5% year over year, with the former landing at $171.03 and the latter at $161.64.
Shares of Goldman Sachs declined by as much as 2.02% to $154.46 per share in premarket trading this morning