Goldman Sachs Tops Wall Street on Revenue, Profits Drops

Goldman Sachs Group posted revenue for the fourth quarter that beat estimates of analysts as its fee from merger consulting jumped by 27%. Net income fell over 65% on the costs of settling a probe into mortgages.

Revenue was down by 5% to end the quarter at $7.27 billion, which was higher than analyst estimates of $7.17 billion. Net income was down, ending the quarter at $765 million equal to $1.27 per share, compared to over $2.17 billion equal to $4.38 per share, after the company agreed to settle a probe by U.S. authorities into the handling by the bank of securities that were mortgage-back, lowered earnings by more than $1.54 billion.

The merger business at Goldman Sachs benefitted from more than $3.8 trillion in global deals during 2015, surpassing a record set previously in 2007, prior to the crisis.

The company said a week ago that it reached an agreement of $5.1 billion on its mortgage cases, cutting its profit from the fourth quarter and closing out the year of record litigation and legal costs.

Goldman Sachs stock was down by 1.4% early Wednesday morning before the opening bell on Wall Street. Stock at the firm has fallen 13% in 2016 trailing the 10% decline by the financials index of the S&P 500.

Revenue from investment banking was up 7% to just over $1.55 billion, with revenue from advising mergers climbing from just over $692 million and $879 million.

For the entire year of 2015, the merger advisory fees increased by 40% to just over $3.47 billion, which were the highest at the firm since 2007.

Revenue from fixed income, commodities and currency trading was up 1.2% to end the quarter at $1.18 billion excluding adjustments for accounting.

That compares to analyst estimates of $1.19 billion. Revenue from equity trading was at $1.77 billion, which was down 7.1% from the same time one year ago, beating an estimate by analysts of $1.68 billion.

 

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