Employees of Goldman certainly profited, as salaries, bonuses and benefits surged 23 percent to $20.2 billion for the year. With headcount growing 15 percent to 30,500 people, that's average compensation of $661,181.
Once again, it was the firm's traders and principal investment desks that set the pace, generating nearly two-thirds of revenue.
Fixed-income, currency and commodities (FICC) trading revenue rose 6 percent to $3.3 billion, reflecting in part $800 million from Goldman's sale of its Cogentrix Energy power plant interests during the quarter and higher revenue from mortgages and interest rate products.
Viniar declined to comment on Goldman's current mortgage trading position -- he disclosed a large gain made from betting against subprime mortgages during the third quarter -- but he indicated the subprime crisis is not yet over.
"We're getting closer to the bottom. I don't know if we reached there yet," Viniar said.
Aided by Gains
Goldman's quarter was also helped by a $500 million net gain from leveraged finance commitments, an area that had prompted $1.7 billion in third-quarter write-offs. Viniar told reporters that leverage loan markets opened briefly in October, allowing the bank to sell some positions and reduce its overall exposure.
Principal investments booked revenue of $1.04 billion from a variety of corporate and real estate investments as well as a $163 million gain on its stake in Industrial and Commercial Bank of China.
Fox-Pitt Kelton analyst David Trone observed that some bearish investors will take issue with the factors behind the Goldman earnings. Roughly 75 cents a share came from unexpected investment gains, not including the Cogentrix gains, which some argued helped Goldman beat expectations.
"The absence of mortgage woes was fully expected. More importantly, the problems in corporate credit markets are having a bigger negative impact than we expected," Trone said in a research note.
Goldman officials stress that its other, client facing businesses helped carry the day.
Investment banking net revenue rose 47 percent to $1.97 billion, as a surge of completed deals helped to double merger advisory fees. Underwriting fees were little changed, as increases in IPOs were offset by a decline in debt issuance.
Equities trading revenue rose 22 percent to $2.59 billion in a volatile period.
One area of concern could be that the investment banking backlog decreased during the quarter. The outlook for M&A, Viniar said, depends on whether the economy holds up well.
"I think there will be LBOs in 2008. There will be plenty of them. I don't think we'll see the mega public-to-private that we saw in 2007 for a while," Viniar said, citing the challenge of selling buyout debt to investors.