All eyes on Tuesday were on financial services giants Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), which both reported their latest quarterly earnings before the bell, sending one company’s stock tumbling and the other’s share price higher.
Just before noon, Goldman Sachs (NYSE:GS) shares had fallen almost 7% after its 4Q 2022 earnings highlighted the impact of falling revenue amid increasing expenses and loan loss provisions.
The company posted earnings of $3.32 per share, well below the consensus market expectation of $5.48 and down 69% year-over-year.
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Revenue also came in below expectations of $10.83 billion at $10.59 billion, down 16% from the same quarter last year. The company attributed its lower revenue to reduced activity in two of its main divisions Asset & Wealth Management and Global Banking & Markets.
Also fuelling investor disappointment was an 11% increase in operating expenses from a year ago to $8.09 billion, about $800 million higher than expected, and an increased provision for credit losses of $972 million, up from $344 in the year-ago quarter.
On the flip side, Morgan Stanley (NYSE:MS) topped the Street’s expectations on both earnings and revenue, sending the company’s shares 6.5% higher just before noon.
Morgan Stanley (NYSE:MS) posted diluted earnings per share of $1.26, narrowly ahead of the $1.25 expected, and revenue of $12.75 billion, above the $12.54 billion forecast.
Earnings per share declined 14% and revenue was down 37% from the year-ago quarter.
The company’s wealth management division was a bright spot, adding 6% year-over-year at $6.25 billion in revenue, while investment banking revenue fell 49% and equity net revenue was down 24%.
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