Fourth-quarter net income after payment of preferred stock dividends totaled $2.23bn (£1.4bn), or $3.79 per share, compared with $4.79bn, or $8.20 a share, a year earlier.
Goldman said net revenue fell ten per cent to $8.64bn, compared with the average analyst forecast of $9bn.
Its shares fell 2.7 per cent to $169.90 in premarket trading.
Net revenue in fixed income, currency and commodities slid 39 per cent from the third quarter to $1.64bn, reflecting what Goldman called "generally low client activity levels."
Still, Chief Executive Lloyd Blankfein in a statement said the bank is "seeing signs of growth and more economic activity" following "difficult" market and economic conditions for much of 2010.
Results at Goldman may signal what investors can expect when Morgan Stanley and Bank of America Corp report their quarterly results later this week.
"If Goldman Sachs can't show a strong performance, then good luck to anyone else trying," said Simon Maughan, an analyst at MF Global in London.
Much of Goldman's profit will flow to bankers and traders as bonuses.
Compensation per employee for 2010 fell 14 per cent from 2009 to about $431,000, and total pay and benefits fell 5 per cent to $15.38bn.
Still, the ratio of compensation and benefits to net revenue rose to 39.3 per cent from 35.8 per cent.