Shares of the American multinational investment bank and financial services company, Goldman Sachs, rose nearly 7.1% on Wednesday after the firm posted a fourth-quarter profit that convincingly exceeded analyst expectations. Strength in its investment banking and investing and lending divisions contributed most to the quarter's results.
The bank reported an EPS of $6.04 per share for the fourth quarter, far outstripping analysts’ estimate of $4.45 per share.
Giving a much needed boost to a strengthening banking sector, the New York-based bank posted a net revenue of $8.08 billion, beating the analyst estimate of $7.55 billion. Total interest income for the quarter stood at $991 million, after an increase of ~16% from Q3 and 10% from the year-ago quarter.
Driven by a 56% surge in advisory revenue to $1.20 billion, the bank reported revenue of $2.04 billion in its investment banking division compared to analysts’ estimate of $1.88 billion. However, the lion's share of Goldman’s estimate-beating revenue came from its investing and lending division, which contributed nearly $1.91 billion to total revenue – approximately $550 million in excess of the $1.35 billion analyst estimate.