Goldman Sachs Group Inc (NYSE:GS) shares are set to climb on Wednesday after the investment bank's fourth-quarter earnings smashed estimates.
Earnings per share for the quarter came in at $11.95 a share, miles higher than the $8.22 that Wall Street has pencilled in and 42% higher than the third quarter of 2024 and up 118% year-on-year.
This was on net revenues of $13.87 billion, which beat the Street's $12.39 billion forecast and was 23% higher than the fourth quarter of 2023 and 9% higher than the third quarter of 2024.
The year-over-year increase was because of higher net revenues across all segments, with significant growth in Global Banking & Markets, with equities sales and trading revenue higher than expected, as was fixed-income, currency and commodities (FICC) trading.
Global Banking & Markets revenues came to $8.48 billion for the quarter, little changed compared with the third quarter but 33% higher year-on-year, as Goldman ranked number-one worldwide for announced and completed mergers and acquisitions in 2024.
Investment banking fees up 24% year-on-year, driven by secondary and initial public offerings, and the firm reported that its investment banking fees backlog increased compared with the end of the third quarter.
Chairman and CEO David Solomon said: "I’m encouraged that we have met or exceeded almost all of the targets we set in our strategy to grow the firm five years ago, and as a result, have both grown our revenues by nearly 50% and enhanced the durability of our franchise.
He said there was an "improving operating backdrop and growing CEO confidence".
Goldman shares were trading 5.5% higher on Wednesday afternoon.