Goldman Profit Declines 19 Percent

Goldman Sachs reported a drop in fourth-quarter profit on Thursday, still hurt by a decline in its fixed-income business but reporting strong results in equity underwriting.

Net income fell 19 percent, to $2.33 billion, or $4.60 a share, compared with $2.89 billion, or $5.60 a share, in the period a year earlier.

The most recent results beat average analysts’ expectations of $4.21 a share, according to data from Thomson Reuters.

The bank made its profit on net revenue of $8.78 billion, beating average expectations of $7.7 billion.

Goldman also disclosed it had set aside $12.61 billion, or 36.9 percent of net revenue, for compensation in 2013. Those figures are down from 2012, when the bank set aside $12.94 billion, or 37.9 percent.

“Our work in advancing our client franchise and in ensuring continued cost discipline has allowed us to provide solid returns even in a somewhat challenging environment,” said Lloyd C. Blankfein, Goldman’s chief executive. “We believe that we are well positioned to generate solid returns as the economy continues to heal and provide considerable upside for our shareholders as conditions materially improve.”

Net revenue in the firm’s fixed-income, currency and commodities division, which includes bond trading, was $1.72 billion, down 15 percent from the period a year earlier. The results are an improvement from third quarter, when Goldman’s fixed-income revenue dropped 44 percent from the previous year, the worst quarter for fixed-income revenue since the height of the financial crisis in 2008.

Strong results in the United States equities markets drove Goldman’s annual return on equity up to 11 percent from 10.7 percent in 2012.

Goldman also announced a dividend of 55 cents a share.

Goldman’s fourth-quarter results come on the heels of a strong quarterly report from Wells Fargo, which reported earnings of $5.6 billion, slightly beating expectations. JPMorgan Chase reported profit on Tuesday of $5.28 billion, a 7.3 percent drop, in large part because of the bank’s legal costs from its various investigations.