Goldman Sachs Group (GS) has posted first-quarter earnings that are lower than analysts’ projections.
The company’s earnings for Q1 were pegged at $3.11 per share, down by 46% from the same period last year, lower than some analysts’ consensus forecast of $3.35 per share. The net revenues of $8.74 billion were modestly lower from what was recorded in 2019 but higher than analysts’ estimates of a $6.75 billion.
Also, GS’s net credit loss provision for the quarter, was $937 million, a more than three-fold increase from the same period in 2019. This was attributed to the continued pressure in the energy sector and the impact of COVID-19 on the broader economic environment.
However, its revenue beat was boosted by solid gains in fixed income and commodities trading, where revenues rose by 33% to $2.97 billion, Global markets revenues jumped by 28% from last year to $5.16 billion and customer deposits rose by a record $12 billion.
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The bank’s investment banking revenue climbed 25% to $2.18 billion as the company helped clients issue debt. Its consumer and wealth management business posted a 21% boost to revenue to $1.49 billion
Chief Executive Officer, Goldman Sachs, David Solomon, said, “I am enormously proud of the determination and dedication of the people of Goldman Sachs, who continue to serve our clients despite high market volatility. Our quarterly profitability was inevitably affected by economic dislocation.”
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Goldman Sachs said market volatility pushed big gains in trading revenues, but noted credit loss provisions tripled from last year as the coronavirus pandemic hit its loan book.
What Wall Street expectation for the bank:
Earnings: $3.35 a share, 41% lower from a year earlier
Revenue: $7.92 billion, a 10% decrease from a year earlier
Trading Revenue: Fixed Income $1.99 billion, equities $1.92 billion
Investment Banking Revenue: $1.87 billion
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