Goldman Sachs (NYSE: GS) earned less money in the fourth quarter of 2010, led by declines in their ultra-profitable market making business.

Net revenues were $8.64 billion, down 3 percent from the previous quarter and 10 percent from the previous year.

 

Net earnings were $2.39 billion, up 26 percent from the previous quarter and down 52 percent from the previous year. Goldman performed better compared to the previous quarter partly because compensation fell from $3.8 billion to $2.2 billion.

 

The decline in the financial performance of Goldman Sachs is largely a result of falling revenues from "institutional client services," defined as "results from the firm’s market making in various [financial] products for and on behalf of clients."

 

Revenues from this segment, at $3.6 billion in the fourth quarter, fell 22 percent the previous quarter and 31 percent from the previous year. Within this segment, the largest decline was in "fixed income, currency and commodities client execution."