Goldman Sachs posts its worst earnings miss in a decade as revenue falls while expenses rise

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Goldman Sachs on Tuesday posted its largest earnings miss in a decade as revenue fell and expenses and loan loss provisions came in higher than expected.Here’s what the investment bank reported:related investing news 4 hours ago 4 days agoEarnings: $3.32 per share vs. $5.48 estimate of analysts surveyed by RefinitivRevenue: $10.59 billion vs. $10.83 billionGoldman said quarterly profit plunged 66% from a year earlier to $1.33 billion, or $3.32 per share, about 39% below the consensus estimate. That made for the largest EPS miss since October 2011, according to Refinitiv data.Revenue held up better, at $10.59 billion, down 16% from a year earlier and just below the estimate.Shares of New York-based Goldman fell more than 6% in early trading.”Widely expected to be awful, Goldman Sachs’ Q4 results were even more miserable than anticipated,” Octavio Marenzi, CEO of Wall Street consultancy Opimas, said in an email. “Revenues were largely in line with forecasts, but earnings took a big hit. The real problem lies in the fact that operating expenses shot up 11%, while revenues tumbled.”More cost-cutting and layoffs at Goldman could be ahead because of that, Marenzi said.Goldman said operating expenses jumped 11% from a year earlier, to $8.09 billion, due to higher compensation, benefits and transaction-based fees, among other reasons. That is about $800 million more than analysts had expected for quarterly costs.Analysts including Betsy Graseck of Morgan Stanley have flagged concerns that wage inflation would hit banks’ results in the fourth quarter.Another reason results disappointed: Goldman posted a $972 million provision for credit losses in the quarter, compared with $344 million a year earlier, as the bank set aside more funds for potential losses in credit card and point-of-sale loan portfolios. That is 50% more than analysts had expected for the quarter.The bank is seeing “early signs of consumer credit deterioration” as the economy slows and more borrowers are at risk of falling behind on payments, CFO Denis Coleman said Tuesday during a call with analysts.Goldman said its companywide revenue decl …

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