(16 January 2020)DAILY MARKET BRIEF 2:Goldman Sachs misses profit expectations while revenue beats; stock slips

Shares of Goldman Sachs Group Inc. (GS) slipped 0.5% in premarket trading Wednesday, after the investment and consumer bank reported a fourth-quarter profit that fell well short of expectations, while revenue beat. Net income fell to $1.72 billion, or $4.69 a share, from $2.32 billion, or $6.04 a share, in the year-earlier period, as operating expenses increased 42% as a result of "significantly higher" compensation and provisions for litigation and regulatory proceedings. The FactSet consensus for earnings per share was $5.47. Total revenue rose 23% to $9.96 billion, above the FactSet consensus of $8.55 billion, as net interest income rose 7.5% to $1.07 billion compared with expectations of a decline to $984.1 million. Investment banking revenue slipped 6% to $2.06 billion, global markets revenue rose 33% to $3.48 billion and consumer and wealth management revenue increased 8% to $1.41 billion. Within markets, fixed income, currency and commodities revenue rose 63% to $1.77 billion, above the FactSet consensus of $1.16 billion, while equities revenue grew 12% to $1.71 billion, but missed expectations of $1.75 billion. The stock has run up 19% over the past three months through Tuesday, while the Dow Jones Industrial Average has gained 7.1%.

By Ipek Ozkardeskaya