Goldman Sachs misses 4th-quarter earnings forecasts as investment banking, asset management revenue sink
- Goldman Sachs reported fourth-quarter earnings that missed on earnings and revenue estimates Tuesday.
- Earnings per share came in at $3.32, below the $5.48 estimate, while revenue came in at $10.59 billion, versus the estimated $10.83 billion.
Goldman Sachs reported fourth-quarter earnings Tuesday that fell short on analysts' estimates, with the Wall Street giant seeing declines in investment banking and asset management revenue.
Asset management revenue tumbled 27% to $3.56 billion, and investment banking fees sank 48% to $1.87 billion.
Equity trading revenue rose 5% to $2.07 billion, while fixed income trading jumped 44% to $2.69 billion. Consumer platform revenue shot up 171% to $513 million led by higher credit card balances.
"Against a challenging economic backdrop, we delivered double-digit returns for our shareholders in 2022. 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 CEO David Solomon.
Shares of Goldman Sachs slipped more than 2.3% in premarket trading Tuesday.
Here are some key numbers:
- Revenue: $10.59 billion versus the average forecast of $10.83 billion
- Earnings per share: $3.32 versus the average forecast of $5.48
Across Wall Street, the business of underwriting stocks and bonds, as well as advising on deals, has dried up, which has dragged investment banking revenues down.
On Friday, rival Citigroup beat fourth-quarter forecasts but saw investment banking revenue tumble 58%. JPMorgan also beat earnings estimates but CEO Jamie Dimon warned of an increasingly dark macro environment.
Meanwhile, Goldman Sachs in particular lost billions on its nascent consumer banking experiment. On Friday, it said its newly formed technology and consumer unit suffered the equivalent of $3 billion in pre-tax losses since 2020.
Meanwhile, the firm is set to let go as many as 3,200 staffers, or about 6.5% of its workforce, with consumer banking teams taking a particularly hard hit.
"We've just been hearing that today was doomsday and that we'd start hearing cuts this morning," one Goldman employee told Insider last week. "Every 10 minutes, I just kept hearing that someone was being let go.
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