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Goldman Sachs Earnings Fall Short. It Was No JPMorgan-Style Blowout.

Goldman Sachs reported mixed quarterly earnings. Earnings per share of $4.69 were below the $5.47 Wall Street had expected, but revenue was higher than anticipated. Its stock is dipping.

Earnings per share of $4.69 were below the $5.47 Wall Street had expected, but revenue was higher than anticipated.

Goldman Sachs Group shares dipped as the bank reported mixed quarterly earnings using a revamped business-unit breakdown that is meant to give investors more insight into how the firm makes money.

Goldman stock (ticker: GS) was down 0.5% in early Wednesday trading.

The bank delivered fourth-quarter earnings per share of $4.69 and revenue of $9.96 billion. The profit was below the $5.47 per share that Wall Street expected, but revenue was above the $8.55 billion that FactSet said investors had anticipated.

The bank set aside $1.2 billion last year to cover potential fines and legal settlements. That sum, which is likely to be used to pay to settle an investigation of the bank’s role in the 1 Malaysia Development Bhd. scandal, chipped 13% off Goldman’s net income for the year.

“Strong performance in the fourth quarter helped us to deliver solid results for the year, while continuing to invest in new businesses,” chairman and chief executive David Solomon said in a statement. Notably, he said “we aim to drive higher returns in the future,” and promised to give more detail on the bank’s financial targets when it holds its first-ever investor day later in January.

Goldman’s performance in the fourth quarter lagged behind that of JPMorgan Chase (JPM), which reported blowout results on Tuesday. JPMorgan said it notched record annual revenue and net income in 2019 and saw revenues in equities trading jump 15% in the fourth quarter, while fixed-income revenue surged 86% compared with the previous year’s fourth quarter.

While JPMorgan was undoubtedly helped by the fact that the end of 2018 provided a favorable comparison due to the relative volatility of global markets at the time, the swing in Goldman’s results was far more tame. Its equities revenues were 2% higher in the fourth quarter on a year-over-year basis, while fixed income rose 33%.

“Net revenues in investment banking were $7.60 billion for 2019, 7% lower compared with a strong 2018,” Goldman said. Revenue at JPMorgan’s corporate and investment bank climbed 31% year on year to $9.5 billion.

In the fourth quarter of 2018, JPMorgan’s investment-banking revenue dropped 4% year on year, while Goldman’s increased 13%.

Write to Ben Walsh at ben.walsh@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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