Two top Wall Street firms reported solid earnings gains Thursday, showing continued strength in the investment banking and stock trading sectors.
Investment firm Goldman Sachs Group Inc. posted a 36 percent increase in earnings for its fourth quarter and said earnings for all of 2005 set a record on strong investment banking fees.
The quarterly earnings matched Wall Street estimates, though the company’s full-year results fell short of expectations.
Bear Stearns Cos. said its profit rose 15 percent in its fourth quarter, pushing its full-year earnings up 9 percent on strong proprietary stock trading revenues and an increase in its global clearing business.
The investment firm also said it has reached a tentative settlement with the U.S. Securities and Exchange Commission and the New York Stock Exchange over improper mutual fund trading practices. The company agreed to pay $250 million in fines and said it will hire independent consultants to review its trading procedures.
The settlement will not have an effect on earnings, the company said.
For the fourth quarter ended Nov. 25, Goldman Sachs earned $1.62 billion, or $3.35 per diluted share, compared with $1.19 billion, or $2.36 per diluted share, in the year-ago quarter. Revenue surged 37 percent to $6.296 billion from $4.58 billion in the fourth quarter of 2004.
Analysts surveyed by Thomson Financial had forecast fourth-quarter earnings of $3.35 per share on revenues of $5.91 billion.
For the fourth quarter ended Nov. 30, Bear Stearns earned a record $407 million, or $2.90 per diluted share, up from $352.6 million, or $2.61 per diluted share, in the year-ago quarter. Revenues rose 3 percent to $1.9 billion from $1.8 billion in the fourth quarter of 2004.
Analysts had forecast fourth-quarter earnings of $2.63 per share on revenues of $1.798 billion.