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Goldman Sachs posts first quarterly loss since 2011
US-banking giant Goldman Sachs beat Wall Street estimates with the release of its fourth-quarter profits on Wednesday, but sweeping tax code changes signed into law by the President in December dragged the group to its first quarterly loss in six years.
A strong performance from Goldman Sach's investment banking helped soften the blow from lower levels of trading elsewhere, but a one-time charge of $4.40bn from the Republican tax package pushed the Manhattan-based lender into the red to the tune of $2.14bn, compared to a net profit of $2.15bn it had seen at the same time twelve months earlier.
However, taking away the tax charge, Goldman Sachs ended the quarter with earnings per share of $5.68, topping analysts' estimates of $4.91, as revenue from investment banking, including fees charged for underwriting, IPOs and merger and acquisitions advisory, leapt 44.1% throughout the quarter to $2.14bn.
The bank's bonds, currencies and securities trading wing earned a total of $1bn over the quarter, a 50% year-on-year decrease.
Revenue fell 4.1% over the quarter to $7.83bn, which still trumped expectations of $7.61bn on the Street, as Goldman Sachs shifted its energy away from its bond and equity trading divisions to less market-sensitive units like investment management and consumer lending.
As of 1340 GMT, shares had fallen 1.45% in pre-market trading to $258.46 each.