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Goldman Sachs' profit drops 52% in 4th quarter

The Wall Street firm earns $2.39 billion in the last three months of 2010, down from $4.95 billion a year earlier. Revenue declines 10% to $8.64 billion.

January 20, 2011|By Nathaniel Popper, Los Angeles Times

Reporting from New York — Goldman Sachs Group Inc.'s revenue and profit tumbled in the fourth quarter, reflecting a slowdown across Wall Street.

The firm, the most storied on Wall Street, reported Wednesday that it earned $2.39 billion, or $3.79 a share, in the last three months of 2010. That was down 52% from $4.95 billion, or $8.20, in the same period of 2009.

Revenue fell 10% to $8.64 billion from $9.62 billion a year earlier.

For all of 2010, Goldman's profit fell 38% from the year before, to $8.35 billion, or $13.18 a share. Revenue sank 13% to $39.2 billion.

Although the latest earnings were only slightly worse than expected by analysts, Goldman's shares opened lower Wednesday on the news and kept falling during the trading session as the financial sector led the overall market down. The company's stock closed down $8.19, or 4.7%, at $166.49.

In 2009, Goldman led the way in capitalizing on ideal trading conditions that helped a number of banks quickly bounce back from the recession.

But last year Goldman recorded lower revenue in such major operations as trading, underwriting stock and bond offerings, and advising companies on mergers and acquisitions.

"Market and economic conditions were difficult for much of 2010," Chief Executive Lloyd Blankfein said in a statement.

The two bright spots were Goldman's work managing the assets of wealthy clients and the performance of the bank's investments made without clients. The latter category, known as principal investments, gained fresh attention this month after Goldman put $450 million of its own money into Facebook Inc.

The bank allocated $15.38 billion to employee compensation in 2010, down 5% from the year before. That works out to $431,000 per employee, down 13% from $498,000 in 2009.

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