>>> Goldman Sachs beats by $0.06, reports revs in-line

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Goldman Sachs beats by $0.06, reports revs in-line

Reports Q4 (Dec) earnings of $4.38 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus Estimate of $4.32; revenues fell 8.3% year/year to $7.69 bln vs the $7.64 bln consensus.

Investment Banking
  • Net revenues in Investment Banking were $1.44 billion for the fourth quarter of 2014, 16% lower than the fourth quarter of 2013 and 2% lower than the third quarter of 2014.
  • Net revenues in Financial Advisory were $692 million, 18% higher than the fourth quarter of 2013.
  • Net revenues in Underwriting were $748 million, 34% lower than a strong fourth quarter of 2013.
Institutional Client Services
  • Net revenues in Institutional Client Services were $3.15 billion for the fourth quarter of 2014, 8% lower than the fourth quarter of 2013 and 17% lower than the third quarter of 2014.
  • Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.22 billion for the fourth quarter of 2014, 29% lower than the fourth quarter of 2013. During the quarter, Fixed Income, Currency and Commodities Client Execution operated in an environment generally characterized by difficult market-making conditions and continued low levels of activity, particularly in credit products, interest rate products and mortgages.
  • Net revenues in Equities were $1.93 billion for the fourth quarter of 2014, 15% higher than the fourth quarter of 2013.
Expenses
  • Non-compensation expenses were $2.52 billion for the fourth quarter of 2014, 17% lower than the fourth quarter of 2013 and 11% higher than the third quarter of 2014. Net provisions for litigation and regulatory proceedings for the fourth quarter of 2014 were $161 million compared with $561 million for the fourth quarter of 2013.
  • Compensation Expense was $12.7 bln or 36.8% of revenues.
Capital
  • Book value per common share was $163.01 and tangible book value per common share was $153.79, both approximately 7% higher compared with the end of 2013 and approximately 1% higher compared with the end of the third quarter of 2014.
  • The firm's Common Equity Tier 1 ratio was 12.2% as of December 31, 2014, up from 11.8% as of September 30, 2014.