Goldman Sachs reported a 21 percent drop in quarterly profit as revenue from fixed-income trading fell in what Chief Executive Lloyd C. Blankfein described as "a somewhat challenging environment."
Net income applicable to common shareholders fell to $2.25 billion, or $4.60 per share, in the fourth quarter from $2.83 billion, or $5.60 per share, in the same quarter of 2012, the Wall Street bank said on Thursday. Analysts had expected earnings of $4.22 per share, according to Thomson Reuters.
Goldman's shares were down marginally at $178.50 before the start of trading on the New York Stock Exchange on Thursday. (Click here to track the company's shares in pre-market trade.)
The bank was stung by its heavy reliance on the bond market, which has historically been a source of great profit.
The bond market began to soften in the fourth quarter as investors prepared for higher interest rates, a shift that affected trading, underwriting and investment income for Wall Street banks.
Goldman's revenue from client trading in fixed income, currencies and commodities (FICC) dropped 15 percent in the period to $1.72 billion.