Goldman Sachs Q4 Profit Plunges 69%, Misses Estimates

(RTTNews) - Goldman Sachs Group Inc. (GS) reported Tuesday that profit for the fourth quarter plunged 69 percent from last year, reflecting higher provisions for bad loans, 16 percent drop in net revenues and 11 percent higher operating expenses. Both earnings and quarterly revenues missed analysts' expectations.

In Tuesday pre-market trading, GS is currently trading on the NYSE at $364.50, down $9.50 or 2.54 percent.

For the quarter, net earnings applicable to common shareholders declined to $1.33 billion or $3.32 per share from $3.81 billion or $10.81 per share in the prior-year quarter.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $5.48 per share for the quarter. Analysts' estimates typically exclude special items.

Provision for credit losses for the quarter was $972 million, compared to $344 million last year, primarily reflecting provisions related to the credit card and point-of-sale loan portfolios, primarily from growth and net charge-offs, and individual impairments on wholesale loans.

Operating expenses were $8.09 billion for the fourth quarter, 11 percent higher than last year, reflecting higher compensation and benefits expenses, higher transaction based expenses, the inclusion of NNIP and GreenSky and impairments related to consolidated investments.

Net revenues for the quarter declined 16 percent to $10.59 billion from $12.64 billion in the same quarter last year, reflecting significantly lower net revenues in Asset & Wealth Management and lower revenues in Global Banking and Markets. Analysts expected revenue of $10.83 billion for the quarter.

Net revenues in Global Banking & Markets were $6.52 billion for the fourth quarter, down 14 percent from the previous year, primarily due to 48 percent lower revenues in Investment Banking and a 5 percent decline in Equities net revenues.

Net revenues in Asset & Wealth Management were $3.56 billion for the fourth quarter, 27 percent lower than the prior year, reflecting significantly lower net revenues in Equity investments as well as Debt investments.

Net revenues in Platform Solutions were $513 billion, 171 percent higher than last year, reflecting significantly higher net revenues in Consumer platforms and higher net revenues in Transaction banking and other.

On January 13, 2023, the Board of Directors of Goldman Sachs declared a dividend of $2.50 per common share to be paid on March 30, 2023 to common shareholders of record on March 2, 2023.

"Our clear, near term focus is realizing the benefits of our strategic realignment which will strengthen our core businesses, scale our growth platforms and improve efficiency," said David Solomon, Chairman and CEO.

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