For the full year, Goldman’s investment bank had a blockbuster year, earning net revenues of $3.47 billion, up 40 percent from a year earlier as it continues to be a highly sought after adviser for the largest and most complicated deals.
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Q4 earnings of $765M or $1.27 per share after a $1.8B or $3.41 charge for the mortgage settlement. Analysts’ estimates typically exclude special items.
Net revenue fell 5.4% to US$7.27bil (RM31.9bil), beating the average analyst forecast of US$7.07bil (RM31.02bil). While competitors like Morgan Stanley have slashed their fixed income units to account for reduced client activity over the last several quarters, Schwartz said the business could rebound.
Book value per common share was $171.03 and tangible book value per common share was $161.64, both 5% higher compared with the end of 2014 and essentially unchanged compared with the end of the third quarter of 2015. The cuts affected 1 200 employees, a person briefed on the matter said.
Goldman Sachs’ fourth-quarter earnings were dragged down by continued weakness in its trading division as well as massive legal costs tied to its handling of mortgage securities. The stock is now trading down 1.71% at $153.94, as of 7:51 AM EST. Goldman Sachs Chief Financial Officer Harvey Schwartz said the settlement had been “the most significant outstanding legal matter” for the firm.
“In the first couple of weeks, it’s not been particularly strong and we do need to see some of the stability to come back for us to really see that conversation start to pick up”, JPMorgan Chase & Co CFO Marianne Lake said Thursday on the bank’s fourth quarter earnings call, noting that M&A dialogue still remained active.
Revenue from Goldman’s investment-and-lending arm, a collection of debt and equity holdings that is often sensitive to market moves, fell 15% to $1.3 billion from $1.53 billion a year prior. Osborn Rohs Williams & Donohoe now owns 4,381 shares of the investment management company’s stock valued at $790,000 after buying an additional 29 shares in the last quarter. In the past week, other large United States banks reported trading results that ranged from a decrease of 4 per cent to an increase of 11 per cent, many helped by the fact that last year’s fourth quarter was one of the industry’s weakest in recent years.
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In other news, COO Gary D. Cohn sold 39,290 shares of the business’s stock in a transaction that occurred on Wednesday, November 25th.
