Goldman Sachs posts jump in profits on merger-advisory, trading weak
By Alexander Bueso
Date: Wednesday 16 Jan 2019
(Sharecast News) - Goldman Sachs posted a big jump in profits at the tail-end of 2018 despite lacklustre trading activity.
For the three months to December, Goldman saw its bottom-line increase to $2.54bn, versus a loss of $5.51bn in the year-ago period, for earnings per share of $6.04.
Boosting the firm's net income was a $467m tax gain.
In the fourth quarter of 2017, what is perhaps the most iconic bank on Wall Street endured an EPS loss of -$5.51, as a result of a tax charge.
The firm's top-line on the other hand dipped by 1% to $8.08bn, even as management cut compensation costs by 11%.
It was also despite a 56% jump in merger-advisory fees, which hit a more-than-decade high, netting the investment bank $1.2bn from that unit, a better performance than most analysts on the Street had anticipated.
Dragging on its results, the investment banking arm saw revenues decline by 5% to $2.04bn, which was nevertheless also better than analysts' average estimate of $1.93bn.
Underwriting was especially weak, with revenues down by 38% to $843m.
At $2.43bn, fourth quarter trading revenues also fell short of forecasts, led by an 18% drop at its fixed income unit.
As of 1553 GMT, shares of Goldman were up by 6.86% to $192.26.
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