--> GS +0.50% in pre market only 40k shares traded
Goldman Sachs beats by $0.28, beats on revs
- Reports Q4 (Dec) earnings of $5.08 per share, $0.28 better than the Capital IQ Consensus of $4.80; revenues rose 12.3% year/year to $8.17 bln vs the $7.8 bln Capital IQ Consensus.
- Annualized ROE was 11.4% for the fourth quarter of 2016
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Investment Banking
- Net revenues in Investment Banking were $1.49 billion for the fourth quarter of 2016, 4% lower than the fourth quarter of 2015 and 3% lower than the third quarter of 2016.
- Net revenues in Financial Advisory were $709 million, 19% lower compared with a strong fourth quarter of 2015, reflecting a decrease in industry-wide transactions.
- Net revenues in Underwriting were $777 million, 16% higher than the fourth quarter of 2015, due to significantly higher net revenues in debt underwriting, reflecting higher net revenues from leveraged finance and asset-backed activity.
- Net revenues in equity underwriting were lower, reflecting a decrease in industry-wide initial public offering volumes. The firm's investment banking transaction backlog increased compared with the end of the third quarter of 2016.
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Institutional Client Services
- Net revenues in Institutional Client Services were $3.60 billion for the fourth quarter of 2016, 25% higher than the fourth quarter of 2015 and 4% lower than the third quarter of 2016.
- Net revenues in Fixed Income, Currency and Commodities Client Execution were $2.00 billion for the fourth quarter of 2016, 78% higher compared with a difficult fourth quarter of 2015, reflecting higher net revenues across all major businesses, including significant increases in credit products and interest rate products. During the fourth quarter of 2016, Fixed Income, Currency and Commodities Client Execution operated in an environment generally characterized by improved market conditions, including rising interest rates and tighter credit spreads.
- Net revenues in Equities were $1.59 billion, 9% lower than the fourth quarter of 2015, primarily reflecting lower net revenues in equities client execution, due to significantly lower net revenues in cash products, partially offset by higher net revenues in derivatives.
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Investing & Lending
- Net revenues in Investing & Lending were $1.48 billion for the fourth quarter of 2016, 15% higher than the fourth quarter of 2015 and 6% higher than the third quarter of 2016. The increase in net revenues compared with the fourth quarter of 2015 was primarily due to significantly higher net revenues in debt securities and loans, driven by higher net interest income and higher net gains from investments.
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Investment Management
- Net revenues in Investment Management were $1.61 billion for the fourth quarter of 2016, 3% higher than the fourth quarter of 2015 and 8% higher than the third quarter of 2016. The increase compared with the fourth quarter of 2015 was due to higher incentive fees and transaction revenues.
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Expenses
- Non-compensation expenses were $2.33 billion for the fourth quarter of 2016, 44% lower than the fourth quarter of 2015 and 11% higher than the third quarter of 2016. The decrease compared with the fourth quarter of 2015 was primarily due to significantly lower net provisions for mortgage-related litigation and regulatory matters, which are included in other expenses. Net provisions for litigation and regulatory proceedings for the fourth quarter of 2016 were $147 million compared with $1.95 billion for the fourth quarter of 2015.