The Goldman Sachs Group, Inc.’s GS fourth-quarter 2024 adjusted earnings per share of $11.95 surpassed the Zacks Consensus Estimate of $7.99. This compares favorably with $5.48 reported in the year-ago quarter.
For 2024, adjusted earnings per share were $40.54 compared with $22.87 recorded in 2023.
Shares of the company gained almost 2.2% in pre-market trading on better-than-expected results, driven by solid investment banking (IB) business performance.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
As expected, the IB business witnessed a solid growth. Equity underwriting fees jumped 98% and debt underwriting fees grew 50.6%. However, advisory fees fell 4.4%. Overall, total IB fees were up 24% from the prior-year quarter to $2.27 billion.
Goldman’s results benefited from a strong performance in its IB business and a solid Asset & Wealth Management division. A decline in expenses was another positive. However, a rise in provisions remains a near-term concern.
Net earnings (GAAP basis) of $4.1 billion increased 37.5% from the prior-year quarter.
For 2024, the company reported net earnings of $14.3 billion, which surged 67.6% year over year.
Goldman’s Revenues Increase and Expenses Fall
Net revenues for the quarter of $13.9 billion increased 22.5% from the year-ago quarter. Also, the top line surpassed the Zacks Consensus Estimate of $11.63 billion.
Net revenues of $53.5 billion for 2024 increased 15.7% from the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $51.97 billion.
Total operating expenses decreased 2.7% year over year to $8.26 billion. The decline was due to a fall in depreciation and amortization costs, along with occupancy and other expenses.
Provision for credit losses was $351 million, down 32% from the prior-year quarter.
Goldman’s Quarterly Segmental Performance Improves
The Asset & Wealth Management division generated revenues of $4.72 billion in the reported quarter, up 7.6% year over year. The improvement was driven by higher management and incentive fees and increased net revenues in private banking and lending, partially offset by lower net revenues in debt and equity investments.
Firmwide assets under supervision were a record $3.1 trillion, up 11.6% from the prior-year quarter.
The Global Banking & Markets division has recorded revenues of $8.5 billion, which increased 33.4% year over year. The improvement was driven by an increase in the IB business, along with a rise in equities revenues and Fixed Income, Currency and Commodities Client Execution financing revenues.
The Platform Solutions division’s revenues were $669 million, up 15.9% year over year. The rise was driven by an increase in revenues from consumer platforms.
Goldman’s Capital Ratios Improve
As of Dec. 31, 2024, the standardized Common Equity Tier 1 capital ratio was 15%, up from 14.4% as of Dec. 31, 2023. The company’s supplementary leverage ratio was 5.5%, which remained unchanged year over year.
Goldman’s Capital Distribution Update
During the reported quarter, Goldman returned $2.97 billion of capital to common shareholders. This included $2 billion in share repurchases and common stock dividends of $978 million.
Our View on Goldman
Goldman’s focus on IB and trading businesses, along with strong deal-making pipelines, will likely support the top line. Active client engagement and a solid position in announced and completed mergers and acquisitions globally are likely to act as tailwinds. However, a surge in provisions due to a challenging operating backdrop is a concern.
The Goldman Sachs Group, Inc. Price, Consensus and EPS Surprise
The Goldman Sachs Group, Inc. price-consensus-eps-surprise-chart | The Goldman Sachs Group, Inc. Quote
Currently, GS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Banks
M&T Bank Corporation MTB is slated to report fourth-quarter 2024 results on Jan. 16. It has a Zacks Rank #3 (Hold) at present.
Over the seven days, the Zacks Consensus Estimate for MTB’s quarterly earnings per share has remained unchanged at $3.70.
Fifth Third Bancorp FITB is scheduled to release fourth-quarter 2024 earnings on Jan. 21. The company carries a Zacks Rank #3 (Hold) at present.
The consensus estimate for FITB’s quarterly earnings has remained unchanged at 87 cents per share over the past seven days.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
