It is likely that Goldman Sachs, the bank that most everyone outside of 85 Broad St. seems to love to hate, will remain king of The Street for some time.
The New York-based investment bank blew away analyst expectations when it reported fourth-quarter earnings results today. The firm posted a profit of $4.95 billion, or $8.20 a share, for the quarter, on revenue of $9.62 billion. Analysts surveyed by Thomson Reuters predicted earnings of $5.20 a share and revenue of $9.65 billion, according to The Wall Street Journal.
The eye-popping profits are in part due to a sharp cut in compensation. Goldman was expected to award up to some $23 billion to its 31,000 workers this year, but reduced the amount to $16.19 billion, refraining from allocating any revenue to compensation in the fourth quarter. Instead, $500 million of the revenue was directed towards charity. Compensation represented 35.8% of net revenues this year, down from 48% in 2008 and was the lowest ratio in the firm's history.