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Goldman (GS) Beats Q4 Earnings Estimate, Records Tax Expense

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Have you been eager to see how The Goldman Sachs Group, Inc. (GS - Free Report) performed in Q4 in comparison with the market expectations? Let’s quickly scan through the key facts from this NY-based popular bank’s earnings release this morning:

An Earnings Beat

Goldman came out with adjusted earnings per share of $5.68, easily surpassing the Zacks Consensus Estimate of $4.90. Further, the figure compared favorably with earnings of $5.08 in the prior-year quarter. Including income tax expense related to the Tax Reform, the company reported loss per share of $5.51.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for Goldman depicted neutral stance prior to the earnings release. The Zacks Consensus Estimate remained unchanged over the last seven days.

Also, Goldman has a decent earnings surprise history. Before posting earnings beat in Q4, the company delivered positive surprises in three of the prior four quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 9.12% in the trailing four quarters.
 

Revenue Came in Higher Than Expected   
 
Goldman posted revenues of $7.8 billion, outpacing the Zacks Consensus Estimate of $7.6 billion. However, it compared unfavorably with the year-ago number of $8.2 billion.

Key Stats to Note:

  • Goldman ranked  first  in  worldwide  announced  and completed mergers  and acquisitions for 2017 and recorded second highest annual results in investment banking
  • Goldman repurchased 6.6 million shares of its common stock for a total cost of $1.59 billion during the quarter
  • Annualized return on average common shareholders’ equity (ROE) was recorded at 10.8% for 2017
  • Fixed Income, Currency and Commodities Client Execution (FICC) revenues declined 50% year over year in the quarter

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for Goldman. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

How the Market Reacted So Far

Following the earnings release, Goldman shares were down slightly in the pre-trading session. This is in contrary to what the stock witnessed in the prior-day’s session. Clearly, the initial reaction shows that the investors have not considered the results in their favor. However, the full-session’s price movement may indicate a different picture.

Check back later for our full write up on this Goldman earnings report!

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