Goldman Sachs Only Made $1 Billion Profit Last Quarter Goldman Sachs confirmed this week what most people already knew: 2011 was a dismal year by Wall Street's normally high-flying standards. The banking titan reported that net earnings fell by 58% in the last quarter of the year, thanks to reduced investment banking activity. Nevertheless, Goldman managed to scrape out a $1 billion profit, beating Wall Street's reduced expectations. Times are tough! Goldman's comparatively lackluster results capped its worst financial performance since 2008. The bank had profits of $4.4 billion last year, down 47% from the previous year. Annual revenue came in at $28.8 billion, a 26% decline from the previous year. More: Don't Cry for Goldman Sachs, Despite "Bad" Year and Partner Exits Looking ahead, the company faces headwinds: The U.S. economy remains fragile, growth is tepid, and jitters over Europe's debt crisis are casting a cloud over the entire financial services sector. As a result, there is a lot of money sitting on the sidelines - which bodes ill for a company like Goldman that relies on investment banking income to boost its bottom line. The firm is facing a tougher regulatory environment thanks to new rules designed to prevent another financial meltdown, which could crimp its ability to mint the kind of massive profits it's known for. That may be one reason why the firm lost 50 partners last year, the largest exodus in 13 years, according to The New York Times. Goldman also faces several lawsuits over its role in the mortgage meltdown and financial crisis, as well as the recent bankruptcy of MF Global, which was run by Goldman alum Jon Corzine. The bank said it paid its employees 33,300 employees $12.2 billion in 2011, a 21% decrease from one year ago, for an average of $367,000. Of course, Goldman's top bankers and traders can make many times that amount.