Aided by robust asset and wealth management revenue, The Goldman Sachs Group, Inc. (NYSE: GS) reported better than anticipated fiscal 2023 fourth-quarter earnings and revenues. The stock ended Tuesday’s trading session at $380.45, up $2.70, or 0.71%, from the prior close.
The New York-based company reported fourth-quarter revenues of $11.32 billion, up 7% from $10.59 billion in the similar quarter of fiscal 2022.
For the fourth quarter, which ended December 31, 2023, Goldman Sachs posted net income of $1.87 billion, or $5.48 per share, compared with net income of $1.19 billion, or $3.32 per share, in the quarter ended December 31, 2022.
Analysts surveyed by LSEG (formerly Refinitiv) had anticipated the company to report earnings of $3.51 per share on revenues of $10.80 billion.
Commenting on the quarterly results, David Solomon, Chairman and CEO of Goldman Sachs, stated, “This was a year of execution for Goldman Sachs. With everything we achieved in 2023 coupled with our clear and simplified strategy, we have a much stronger platform for 2024.”
Segment wise:
- Investment banking revenues fell by 12% y-o-y to $1.65 billion but matched the StreetAccount estimate.
- Investment management revenues were $2.48 billion, up 10% from last year.
- Market making revenues surged 15% y-o-y to $3.50 billion.
By nature of business:
- Global Banking & Markets revenues were $6.35 billion in 4Q23, down 3% from previous year. Specifically, equities trading revenues jumped 26% y-o-y to $2.61 billion and surpassed forecasts of $2.22 billion. However, fixed income revenues declined 24% y-o-y to $2.03 billion and missed forecasts of $2.53 billion.
- Asset & Wealth Management revenues were $4.39 billion, an increase of 23% on a y-o-y basis. The reported figure surpassed StreetAccount estimate of about $3.85 billion.
- Platform Solutions rose by 12% y-o-y to $577 million in Q4 2023, missing forecasts of $612 million.
Interestingly, provision for loan losses dipped 41% y-o-y to $577 million.
Goldman generates a major portion of its revenues from Wall Street operations. Obviously, the firm usually records extraordinary returns during the bull market and vice versa. The bank’s return on tangible equity was only 8.10% in FY23, much lower than its medium-term goal of 15% to 17%. The financial behemoth also stated that it slashed the workforce by 7% (or 3,200 positions) compared with last year.
The quarterly earnings beat is expected to keep the stock of Goldman Sachs slightly bullish in the near term.
The historical price chart indicates that the stock of Goldman Sachs is consolidating between $375 and $385 after breaking the ascending triangle formation. The stock is also trading above its 50-day moving average, while the Chaikin Money Flow indicator is showing a positive reading. Therefore, we anticipate the stock of Goldman Sachs to remain in an uptrend in the near term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
