Goldman Sachs crushes analysts’ estimates on stronger-than-expected stock trading, investment banking


David Solomon, CEO, Goldman Sachs, speaking at the World Economic Forum in Davos, Switzerland, Jan. 23, 2020.

Adam Galacia | CNBC

Goldman Sachs reported fourth-quarter earnings before the opening bell on Tuesday.

Here are the numbers:

Earnings: $12.08 a share, vs. $7.47 per share expected, according to Refinitiv.
Revenue: $11.74 billion, vs. $9.9 billion estimate.

Expectations are running high for Goldman Sachs CEO David Solomon.

Last week, JPMorgan Chase posted record fourth-quarter trading and advisory results that helped the bank beat profit estimates.

Of the six biggest U.S. banks, Goldman gets the biggest share of its revenue from Wall Street activities including trading and investment banking. For the past few years that has been a detriment to the firm as retail banking has driven the industry’s record profits.

Now, for the final quarter of a year marred by the coronavirus pandemic, Goldman’s model may prove to be an advantage. Firms with vast consumer lending operations were forced to set aside tens of billions of dollars in provisions for soured loans.

But wide-open markets, thanks to the Federal Reserve’s unprecedented actions earlier in the year, are expected to help usher in the best year for trading on Wall Street since the financial crisis. Meanwhile, investment bankers are benefiting from surging demand for IPOs and a record spate of debt issuance.

Goldman shares climbed 11% in 2020, besting the 4.3% decline of the KBW Bank Index.

This story is developing. Please check back for updates.

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