Goldman Sachs misses its earnings estimate, while Morgan Stanley beats as profits drop

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While Morgan Stanley beat its earnings target and Goldman fell well short, both investment banks reported lower net income against a strong year-ago quarter.

Goldman Sachs Group Inc. and Morgan Stanley reported lower fourth-quarter earnings on Tuesday as their investment banking practices handled fewer deals, but Morgan Stanley stock rose after it beat expectations while Goldman moved lower after falling short.

Goldman Sachs GS dropped 2.5% in premarket trades on Tuesday, while Morgan Stanley MS advanced by 1.4%. Broken down, Goldman booked a 27% drop in its asset and wealth management unit to $3.56 billion, while its global banking and markets unit’s revenue fell 14% to $6.52 billion. At the same time, Goldman built up its provision for credit losses by 183% to $972 million, while its operating expenses increased by 11% to $8.09 billion.

Morgan Stanley MS said its fourth-quarter earnings dropped to $2.11 billion, or $1.26 a share, from $3.59 billion, or $2.01 a share, in the year-ago quarter. Fourth-quarter adjusted profit fell to $1.31 a share from $2.08 a share, when breaking out one-time costs such as $133 million related to a December jobs action.Morgan Stanley’s fourth-quarter revenue fell to $12.75 billion from $14.52 billion. The latest revenue figure beat the analyst estimate of $12.54 billion.

 

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