Goldman Sachs profit soars on bond-trading surge
By Olivia Oran and Richa Naidu
(Reuters) - Goldman Sachs Group Inc (GS.N: Quote) reported a nearly fourfold rise in quarterly profit on Wednesday thanks to a surge in bond trading revenue, with its finance chief offering a sunny outlook for business in 2017.
Like other Wall Street banks, Goldman benefited from jumps in volume across fixed-income markets late in the quarter after Donald Trump won the U.S. presidential election and the Federal Reserve raised its key interest rate target.
Business has remained strong in the first few weeks of 2017, Chief Financial Officer Harvey Schwartz said, offering optimism for the rest of the year.
"We've come out of a very low volume, low volatility environment over a number of years," he said on a conference call. "With the shifting policies around the globe, it's an extraordinary catalyst."
However, Goldman's shares fell 0.8 percent to $233.74 at mid-afternoon.
In research notes, analysts said expectations had run up so high leading into Goldman's report, with its stock up nearly 30 percent since the Nov. 8 U.S. election, that even the sharp rise in profit disappointed some investors.
"The bar was high," said Citigroup analyst Keith Horowitz.
While the bank's adjusted earnings per share of $5.08 topped the average analyst estimate of $4.82, some investors were privately expecting a so-called whisper number of $5.50 per share or more, Instinet analyst Steven Chubak said. Continued...