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Goldman Sachs (New York Stock Exchange:GS) values fell 6.5% in trading on Tuesday after the Wall Street firm posted worse-than-expected fourth-quarter earnings boosted by higher-than-expected spending combined with a drop in trading.
In the company’s fourth-quarter earnings call, chief financial officer Denis Coleman also said that Goldman (SG) the Platform Solutions unit, which includes its consumer-focused GreenSky, credit card and Marcus units, incurred $1.8B in expenses for all of 2022.
That included more than $200 million of transaction and integration-related costs driven by its GreenSky and GM card portfolio acquisitions.
“We expect these costs to impact 2023 results as well, albeit at a lower level and decline materially in subsequent years,” Coleman said. He added that the segment’s top priority is achieving profitability and management expects to provide more details on that plan at the company’s investor day in February.
Goldman’s (GS) total operating expenses for the fourth quarter increased to $8.09 billion, beating Visible Alpha’s estimate of $7.27 billion, from $7.7 billion in the third quarter and from $7.7 billion in the third quarter. 7.27 billion in the fourth quarter of 2021.
Compensation and benefits expense increased to $3.76 billion, higher than consensus of $3.28 billion, from $3.61 billion in the third quarter and $3.25 billion in the fourth quarter of 2021. Meanwhile, the workforce fell to 48,500 as of December 31, 2022 from 49,100 as of September 30. it is expected to eliminate thousands of jobs this month.
While expenses increased, the company’s Global Banking and Markets revenues declined 14% on a Q/Q and Y/Y basis, as tighter financial conditions led to a dry spell in M&A activity.
Earlier, Goldman Sachs fourth-quarter earnings fall due to tighter financial conditions
