Goldman Sachs (NYSE: GS) said on Friday it expects fourth-quarter earnings to decrease by about $5 billion due to the new U.S. tax law signed by President Donald Trump last week.
Around two-thirds of the $5-billion decrease is due to repatriation tax, Goldman said in a statement with the U.S. Securities and Exchange Commission.
However, the impact of the tax legislation may differ from the estimate, according to the bank.
Congress last week approved a U.S. tax overhaul, the biggest in 30 years, which includes steep tax cuts for corporations and wealthy taxpayers.
The new law significantly lowers the income tax rate for U.S. companies—to 21% from 35%—allowing them to repatriate cash from overseas, and modifies numerous deductions, among other changes.
Nor is Goldman alone in this boat: the tax overhaul will allow Apple (NASDAQ: AAPL) to bring back its $252.3 billion foreign cash pile without a major tax hit—a long-standing company goal.
Drugmaker Amgen (NASDAQ: AMGN) last Friday also said it expects to incur tax expenses of $6 billion to $6.5 billion over time as it repatriates cash it has accumulated around the world because of the new law.
GS says two-thirds of the reduction is due to the repatriation tax, with the remainder including the implementation of the territorial tax system and the re-measurement of U.S. deferred tax assets at lower corporate tax rates.
Analysts had expected Q4 earnings of $2.08 billion; GS is scheduled to report earnings on Jan. 17.
Goldman opened the last session of 2017 at $253.67, down $2.83, or 1.1%, from Thursday’s close.
