Goldman Sachs on Wednesday surfaced fourth-quarter earnings of $5.68 a share that topped Wall Thoroughfare estimates. The company posted a net loss when factoring in a tax hit, largely because of a one-time dictate for bringing overseas profits back to the U.S.
The investment bank titan also club on revenue, reporting $7.83 billion against estimates of $7.61 billion.
Manner, trading revenues in the critical fixed income, currencies and commodities expanse plunged, falling 50 percent from a year ago. Trading returns overall was down 34 percent.
The numbers come as Goldman looks to development out of its long-time perch atop the trading business into other puts. Mergers and acquisitions continues to be a mainstay for the firm as it held its No.1 ranking on Go bust enclose Street, but the move away from the core business is coming with a fetch.
Shares fell more than 2 percent on Wednesday as investors retaliated to the poor trading results, as well as an update on the bank’s tax rate this year. Goldman chief executive officers said on conference call that its effective tax rate will be 24 percent, exalted than some on Wall Street had assumed would be the case in the wake of the tax betterment bill.
The stock is up just 5.8 percent over the past year, during a control when the S&P 500 surged 22 percent as investors have been easily slack to warm to the new Goldman business model.
“That FICC trading gang was shocking,” Gerard Cassidy, managing director at RBC Capital Markets, told CNBC. “Their FICC have dealing numbers are so much weaker than their competitors.”
In a news issue, Goldman said trading was “a challenging environment characterized by low levels of volatility and low customer activity.” Equities revenue also fell by 14 percent.
“Wear year, we delivered higher revenue and stronger pre-tax margins without considering a challenging environment for our market-making businesses,” Lloyd C. Blankfein, Goldman’s chairman and CEO, said in a communiqu.
“With the global economy poised to accelerate, new U.S. tax legislation providing tailwinds and a peerless franchise across our businesses, we are well positioned to serve our clients and turn up tell of significant progress on the growth plan we outlined in September,” he added.
Identical to its peers on Wall Street, Goldman had to take a paper writedown due to the tax renovation legislation Congress passed in December. Including its $4.4 billion tax hit, the unshakeable suffered a loss of $5.51 a share.
Goldman did see a stellar quarter in its investment banking mechanics, which saw $2.14 billion in net revenues for the quarter and $7.37 billion for a year, its second pre-eminent ever.
Investment management also continued to be strong, producing $1.66 billion for the dwelling, a 4 percent gain from 2016, with the full-year total of $6.22 billion on a 7 percent increase.