Goldman Sachs Group Crushes Estimates

Seth Jayson, The Motley Fool
Updated

Goldman Sachs Group (NYS: GS) reported earnings on Jan. 18. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Goldman Sachs Group missed on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly, and earnings per share dropped significantly.

Margins contracted across the board.

Revenue details
Goldman Sachs Group recorded revenue of $6.0 billion. The 15 analysts polled by S&P Capital IQ predicted revenue of $6.3 billion. Sales were 30% lower than the prior-year quarter's $8.6 billion

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $1.84. The 16 earnings estimates compiled by S&P Capital IQ predicted $1.41 per share. GAAP EPS of $1.84 for Q4 were 51% lower than the prior-year quarter's $3.79 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 90.7%, 260 basis points worse than the prior-year quarter. Operating margin was 20.6%, 2,150 basis points worse than the prior-year quarter. Net margin was 16.7%, 1,090 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $8.6 billion. On the bottom line, the average EPS estimate is $3.03.

Next year's average estimate for revenue is $32.6 billion. The average EPS estimate is $12.04.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 5,538 members out of 6,237 rating the stock outperform, and 699 members rating it underperform. Among 1,369 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,220 give Goldman Sachs Group a green thumbs-up, and 149 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Goldman Sachs Group is outperform, with an average price target of $137.59.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of The Goldman Sachs Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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