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Last Update: 18-Jan-12 10:02 ET
Goldman Sachs Trading Over 3% Higher Following Earnings Results
Earlier this morning, Goldman Sachs (GS $101.01 +3.33) reported fourth quarter earnings of $1.84 per share, $0.62 better than the Capital IQ Consensus Estimate of $1.22. Revenues fell 30.0% year/year to $6.05 billion versus the $6.32 billion consensus.
Net revenues in Investment Banking were $857 mln for the fourth quarter of 2011, 43% lower YoY and 10% higher QoQ. Net revenues in Financial Advisory were $470 mln, 25% lower than the fourth quarter of 2010, primarily reflecting a significant decline in industry-wide completed mergers and acquisitions. Net revenues in the firm's Underwriting business were $387 mln, 56% lower than the fourth quarter of 2010. Net revenues in both equity underwriting and debt underwriting were significantly lower than the fourth quarter of 2010, primarily reflecting a significant decline in industry-wide activity. The firm's investment banking transaction backlog increased compared with the end of 2010, and decreased QoQ. Net revenues in Fixed Income, Currency and Commodities Client Execution were $9.02 bln for 2011, 34% lower than 2010. Net revenues in Equities were $8.26 bln for 2011, 2% higher than 2010 The effective income tax rate for 2011 was 28.0%, down from 30.3% for the first nine months of 2011.
Capital: Book value per common share was $130.31 and tangible book value per common share was $119.72, both ~1% higher compared with the end of 2010 and both ~1% lower compared with the end of the third quarter of 2011. Under the regulatory capital guidelines currently applicable to bank holding companies (Basel 1), the firm's Tier 1 capital ratio was 13.8% and the firm's Tier 1 common ratio was 12.1% as of December 31, 2011, both unchanged compared with the end of 3Q11.
Compensation and benefits expenses (including salaries, discretionary compensation, amortization of equity awards and other items such as benefits) were $12.22 bln for 2011, a 21% decline compared with $15.38 bln for 2010. The ratio of compensation and benefits to net revenues for 2011 was 42.4%. Total staff decreased 7% compared with the end of 2010. Non-compensation expenses were $2.59 bln, 15% lower YoY and 5% lower QoQ.
Net revenues in Investment Banking were $857 mln for the fourth quarter of 2011, 43% lower YoY and 10% higher QoQ. Net revenues in Financial Advisory were $470 mln, 25% lower than the fourth quarter of 2010, primarily reflecting a significant decline in industry-wide completed mergers and acquisitions. Net revenues in the firm's Underwriting business were $387 mln, 56% lower than the fourth quarter of 2010. Net revenues in both equity underwriting and debt underwriting were significantly lower than the fourth quarter of 2010, primarily reflecting a significant decline in industry-wide activity. The firm's investment banking transaction backlog increased compared with the end of 2010, and decreased QoQ. Net revenues in Fixed Income, Currency and Commodities Client Execution were $9.02 bln for 2011, 34% lower than 2010. Net revenues in Equities were $8.26 bln for 2011, 2% higher than 2010 The effective income tax rate for 2011 was 28.0%, down from 30.3% for the first nine months of 2011.
Capital: Book value per common share was $130.31 and tangible book value per common share was $119.72, both ~1% higher compared with the end of 2010 and both ~1% lower compared with the end of the third quarter of 2011. Under the regulatory capital guidelines currently applicable to bank holding companies (Basel 1), the firm's Tier 1 capital ratio was 13.8% and the firm's Tier 1 common ratio was 12.1% as of December 31, 2011, both unchanged compared with the end of 3Q11.
Compensation and benefits expenses (including salaries, discretionary compensation, amortization of equity awards and other items such as benefits) were $12.22 bln for 2011, a 21% decline compared with $15.38 bln for 2010. The ratio of compensation and benefits to net revenues for 2011 was 42.4%. Total staff decreased 7% compared with the end of 2010. Non-compensation expenses were $2.59 bln, 15% lower YoY and 5% lower QoQ.
