Goldman Sachs reports strong Q4 results
Goldman Sachs is back to being the Goldman Sachs of old.
It hit on all cylinders in the fourth quarter of 2012, which resulted in a stellar earnings report. The top line result suggests that the bank is getting back to its growth days. Net revenues were $9.2 billion, a 53 percent rise year-over-year. As for earnings, the bank reported $5.60 in diluted earnings per share, which trounced analysts' expectations of about $3.80 a share. The resu
lts were solid across the board.
In FICC activity, net revenues were $2.04 billion for, up 50 percent year over year; strong net revenues in credit products and mortgages were offset partly by commodities and interest rate products. In investment banking, net revenues were up 64 percent year over year, powered by strong advisory activity, reflecting more mergers and acquisition activity.
Underwriting was also strong. Returning to a past strength, the bank reported some merchant-banking-like gains, notably a gain of $334 million from the firm's investment in ICBC and net gains of $789 million from other investments. On top of all this, the bank was able to hold the line on compensation expenses. Goldman set aside 37.9 percent of 2012 annual revenue for compensation, compared with 42.4 percent in 2011.
Unsurprisingly, Mr. Market liked what it saw and bid the stock up on the news.
- here are the results