Goldman Sachs profit drops, still beats expectations on strength of business cost reduction measures   

Goldman Sachs reported quarterly earnings this week, surpassing analysts' expectations even though profit slumped.

The New York-based banking giant said Wednesday it earned $978 million in the fourth quarter, a figure 58 percent lower than the $2.23 billion logged in the same period the year prior. While net income plummeted, the financial giant's per share earnings of $1.84 beat analysts' projections.

Goldman chief executive Lloyd Blankfein told investors that the company's aggressive business cost reduction measures helped offset tepid worldwide trading. Economists and financial analysts assert market volatility in 2011 negatively impacted earnings at nearly every bank, particularly those – like Goldman – that rely heavily on trading for revenue.

"This past year was dominated by global macro-economic concerns which significantly affected our clients' risk tolerance and willingness to transact," he said in a statement. "While our results declined as a consequence, I am pleased that the firm retained its industry-leading positions across our global client franchise while prudently managing risk, capital and expenses."

In an effort to reduce overhead, the bank cut employee compensation 21 percent. It also announced layoffs aimed at improving efficiency and net income, according to experts.

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