-=Goldman Sachs (GS) reported earnings on Wed 17 Jan 2017 (b/o)

Goldman Sachs (GS) topped the Street's forecasts, but its trading operations continued to see significant weakness compared to other big banks. 

Goldman Sachs beats by $0.73, beats on revs 

• Reports Q4 (Dec) earnings of $5.68 per share, excluding tax legislation, $0.73 better than the Capital IQ Consensus of $4.95; revenues fell 4.2% year/year to $7.83 bln vs the $7.64 bln Capital IQ Consensus.
• Net revenues in Investment Banking were $2.14 billion for the fourth quarter of 2017, 44% higher than the fourth quarter of 2016 and 19% higher than the third quarter of 2017. Net revenues in Financial Advisory were $772 million, 9% higher than the fourth quarter of 2016, reflecting higher net revenues in the U.S. Net revenues in Underwriting were $1.37 billion, 76% higher than the fourth quarter of 2016, due to significantly higher net revenues in both debt underwriting, primarily from leveraged finance activity, and equity underwriting, primarily from secondary offerings. 
• Net revenues in Institutional Client Services were $2.37 billion for the fourth quarter of 2017, 34% lower than the fourth quarter of 2016 and 24% lower than the third quarter of 2017.
• Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.00 billion for the fourth quarter of 2017, 50% lower than the fourth quarter of 2016, which included more favorable market conditions. This decrease was due to significantly lower net revenues in currencies, credit products, interest rate products and commodities. During the fourth quarter of 2017, Fixed Income, Currency and Commodities Client Execution continued to operate in a challenging environment characterized by low levels of volatility and low client activity.
• Net revenues in Equities were $1.37 billion, 14% lower than the fourth quarter of 2016, due to significantly lower net revenues in equities client execution, reflecting significantly lower net revenues in derivatives and lower net revenues in cash products.

1. Non-compensation expenses were $2.57 billion for the fourth quarter of 2017, 10% higher than the fourth quarter of 2016 and 18% higher than the third quarter of 2017. The increase compared with the fourth quarter of 2016 was primarily due to higher expenses related to consolidated investments (primarily in depreciation and amortization expenses and other expenses) and higher professional fees, primarily related to consulting costs.