Goldman Sachs stock falls amid earnings miss
Goldman Sachs shares trend lower amid Big Bank earnings season.
Video Transcript
SEANA SMITH: Let's take a look at Goldman Sachs. Look at that, losses of just about 6%. Shares sliding into the close. The stock on pace for its worst intraday performance in nearly a year.
This comes following its fourth-quarter earnings report. Now, the bank missed on both the top and bottom lines. Quarterly profit dropping nearly 66% from a year ago. EPS of $3.32. That fell short of what the Street was looking for, and it was actually the bank's biggest earnings miss in more than a decade.
And, Dave, when we take a look at these numbers, I think the Street expected these results to be weak, but they were far worse than they had been expecting. Goldman also setting aside $1 billion to cover potential future loan losses. I think it speaks to the environment that we are in right now and really echoes what we heard from David Solomon, the CEO there, saying that CEOs are cautious, particularly for the near term. Mentioning the next couple of quarters will likely be a bit bumpy and a bit challenging.
DAVE BRIGGS: Yeah, I think if there are two patterns that emerge throughout all the bank earnings, it's future loan losses. And to your point, about $1 billion. And the other one is investment banking just wiped out, nearly devastated. Basically all the big banks reporting about a 50% decline in mergers and-- M&A activity. So those are the two giant takeaways.
We'll get to Morgan Stanley in a minute, who has an interesting upside. But first, Octavio Marenzi basically [? summised ?] Goldman well-- from Opimas. More miserable report than expected. Operating expenses up 11%.
And to your point, when you've got profits down nearly 70%, what does that tell you is around the corner? Probably even more layoffs than the 3,000 that Goldman Sachs has already had to endure.
And on one hand, you have to figure investment banking is going to turn around in 2023. But on the other hand, does Goldman find themselves-- do they insulate themselves from the macro situation better than they did last year? You have to figure David Solomon's goal is just that.
They have suffered big losses in the consumer area of banking and largely exiting that. A brutal, brutal report for Goldman and nothing like we've come to expect.
SEANA SMITH: Yeah, certainly not, and I think this just speaks to the environment that we are in right in now. And the comments that we got from Solomon, like you said, really were similar to what we heard from a number of the bank CEOs last week just in terms of what they were forecasting in terms of their guidance. That was a huge mover for the stocks on Friday, and I think that's the same here when we're looking at Goldman off just about 6%, the worst performer in the Dow and a big reason why we're all just about 300 points.
