Goldman Sachs gets an embarrassing start to the year

The stock has climbed 41 percent in the last 12 months.

Goldman reported earnings of $5.15 per share, below the consensus forecast of $5.31 per share.

Moreover, Goldman Sachs revenue from the stock trading fell 6% to $1.67 billion from $1.78 billion in the year-ago quarter, and the fees from fixed-income trading, a larger pot that includes bonds, commodities, and currencies, grew up slightly to $1.69 billion. Dodge & Cox acquired a new stake in Goldman Sachs Group during the fourth quarter valued at approximately $3,399,521,000.

"The operating environment was mixed, with client activity challenged in certain market-making businesses and a more attractive backdrop for underwriting in our investment banking franchise", Chief Executive and Chairman Lloyd Blankfein said in a statement.

WARNING: "Cohen Klingenstein LLC Continues to Hold Position in Goldman Sachs Group Inc (GS)" was reported by Chaffey Breeze and is the sole property of of Chaffey Breeze. The bank states that the high revenue in this area is due to a significant increase in net gains from investments in both private and public equities, which were positively impacted by corporate performance and an increase in global equity prices. Finally, CLSA reaffirmed an "outperform" rating and set a $275.00 target price on shares of Goldman Sachs Group in a report on Friday, January 13th.

Goldman shares were down 2.8 percent at $219.95 in premarket trading. The poor results caused the bank's stock to fall sharply.

Despite strong gains in US stocks at the beginning of this year which boosted the markets revenues of most big banks, Goldman Sachs did not benefit from trading almost as much as investors had expected during the quarter.

The Average Earnings Estimate for the Current Fiscal quarter is $3.98 per share, according to consensus of 23 analysts.

Total operating expenses rose 15.2 percent to $5.49 billion.

Goldman Sachs's stock dropped $9.88, or 4.4 percent, to $216.36. However that part of Goldman's business tends to swing up and down as the bank sells investments or puts new valuations on those investments. That also missed analysts' expectations of $8.37 billion. Global Wealth and Investment Management revenue rose 3% to $4.6 billion as loans and leases grew 7% to $9.3 billion and total client balances rose 5% to nearly $2.6 trillion on the back of higher market valuations.

  • Todd Kelly