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 Shares of Goldman Sachs Group Inc. rose 2.0% in premarket trading Tuesday, after the bank and brokerage reported fourth-quarter net income that more than doubled and beat expectations by a wide margin, and revenue that also beat forecasts. Net income grew to $4.51 billion, or $12.08 a share, from $1.72 billion, or $4.69 a share, in the year-ago period. The FactSet consensus was for earnings per share of $7.45. Total revenue increased 17.9% to $11.74 billion, above the FactSet consensus of $9.99 billion, as net interest income jumped 32.4% to $1.41 billion to beat expectations of $1.14 billion. Among business segments, revenue increased the most in market making (53%) and investment banking (34%). Within investment banking, equity underwriting revenue nearly tripled (up 195%) to $1.12 billion, above the FactSet consensus of $784.4 million, while debt underwriting rose 68% to $526 million but missed expectations of $583.8 million. Fixed income, currencies and commodities (FICC) revenue grew 6% to $1.88 billion, missing expectations of $2.06 billion, while equities revenue rose 40% to $2.39 billion to surpass expectations of $1.89 billion. The stock has run up 46.3% over the past three months through Friday, while the Dow Jones Industrial Average has gained 9.3%.
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Shares of Bank of America Corp. slipped 0.2% in premarket trading Tuesday, erasing earlier gains, after the bank reported a fourth-quarter profit that beat expectations but revenue that fell short, as global markets revenue rose less than forecast. Net income fell to $5.5 billion, or 59 cents a share, from $7.0 billion, or 74 cents a share, in the year-ago period. The FactSet consensus was for earnings per share of 55 cents. Total revenue declined 10.1% to $20.10 billion, below the FactSet consensus of $20.58 billion, as net interest income fell 15.5% to $10.25 billion to top expectations of $10.24 billion. Consumer banking revenue fell 13.4% to $8.24 billion, above the FactSet consensus of $8.13 billion, while global markets revenue increased 14.1% to $3.91 billion but missed expectations of $4.10 billion. Equities revenue rose 30% to $1.3 billion, while fixed income, currencies and commodities (FICC) revenue decreased 5% to $1.7 billion. Global banking revenue fell less than forecast and global wealth and investment management revenue declined in line with expectations. "In the fourth quarter, we continued to see signs of a recovery, led by increased consumer spending, stabilizing loan demand by our commercial customers, and strong markets and investing activity," said Chief Executive Brian Moynihan. Earlier, the bank said it had authorized a stock buyback program of $2.9 billion through March 31. The stock has rallied 39.2% over the past three months through Friday, while the SPDR Financial Select Sector ETF has climbed 25.7% and the S&P 500 has gained 10.0%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
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