(Image Source: The Hollywood Reporter)

BY DAVID EARL
ANCHOR CHRISTINA HARTMAN

Grilled on Capitol Hill, celebrated on Wall Street Goldman Sachs this week announced fourth quarter profits fell 58 percent, though the company still beat analysts’ expectations.

The Financial Times reports the numbers...

“Goldman responded to market conditions and client retrenchment – cutting its operating expenses by 14 per cent during the year to $22.64bn. That includes a striking 2,400 subtraction in headcount and a 21 per cent reduction in employee pay – including bonuses paid to its bankers.”

Back in October more than 20 analysts had downgraded estimates for Goldman.
The Wall Street Journal explains Goldman’s right-sizing moves in the wake of the financial crisis...

“Pretty much across the board firms are retrenching and trying to sit back and look for where the opportunities are going to be.”

But Forbes notes Goldman still raked in a billion dollars in profit last year, and CNBC reports, despite the cuts, the financial giant paid out 42 percent of its gross earnings to employees.
Bloomberg talks with a securities analyst who sees plenty of good in Goldman’s strategy.

“The first thing I look at as a securities analyst is are you managing your costs? And we’ve seen a couple of the banks who aren’t necessarily doing that very well but Goldman Sachs clearly has a good handle on that.”

Even after demolishing Q4 earnings expectations by 60 cents a share, a writer for financial blog The Motley Fool isn’t impressed.

“So what we see is an earnings beat with lowered expectations. On Wall Street, where you eat what you kill, there’s been less big game to share.”

A Wall Street Journal host isn’t impressed with Goldman’s 3.7 percent return on equity either.

“Once upon a time in the  go go years of 2006-07 I believe the return on equity was over 30 percent at some point....so basically they’re not making any money right now.”

With it all, Goldman cashed in Wednesday. Shares were up 6.6 percent -- closing at the highest price since the beginning of 2012.