Goldman Sachs Group Inc on Wednesday posted a decline in quarterly profit, in part reflecting declining results in fixed-income trading.
Fourth-quarter net income after payment of preferred stock dividends totaled $2.23 billion, or $3.79 per share, compared with $4.79 billion, or $8.20, a year earlier.
Analysts on average expected profit of about $3.76 per share, Thomson Reuters I/B/E/S said.
Goldman Shares were down 2.7 percent in premarket electronic trading.
The following is reaction from industry analysts and investors:
MALCOLM POLLEY, CHIEF INVESTMENT OFFICER AT STEWART CAPITAL ADVISORS IN INDIANA, PENNSYLVANIA
Trading for their own account and investment banking are a big piece of what they do. If you're just trading for institutional clients, the margins are very thin. If you are going to be an institutional firm, you're not going to make your profit on being an intermediary on buys and sells. People think that Goldman is a client centered firm. They are not. They are a trading firm.
SIMON MAUGHAN, ANALYST MF GLOBAL, LONDON:
It's confirming that Q4 was difficult, particularly on FICC. If Goldman Sachs can't show a strong performance then good luck to anyone else trying to.
But Q4 is the least relevant quarter anyway. The outlook has already improved from what is turning out to be a miserable quarter.
The Q4 compensation has come down, so there is a bit of discipline being shown there.
MATT MCCORMICK, PORTFOLIO MANAGER, BAHL & GAYNOR INVESTMENT COUNSEL, INC IN CINCINNATI:
A lot of these guys had problems, especially going through December, when the ten-year moved 50 basis points, 2.80 to 3.30, that's obviously impacting their revenues.... It's slightly similar to JPM and Citi -- better revenues but still light, though not as light. ... All of them were affected, some more so than others. I expect anybody with any trading operations to have similar results.
It's a quasi hedge fund, if you look at the various deals that they have going on, sometimes they work, sometimes they take a while ... People are going to look at this as the trend, JPM and Citi so-so results. Goldman had some positives but light on revenue - not as light.
(Reporting by Maria Aspan and Dan Wilchins in New York and Steven Slater in London)