A consensus of analysts polled by Thomson Reuters expected earnings of $5.31 per share and revenue of $8.446 billion. Goldman, the fifth-largest USA bank by assets, blamed weakness in commodities, currencies, and credit revenue, as well as lower commissions and fees from equities trading.
Goldman Sachs had a rare miss in its first quarter results, the bank said Tuesday, as its typically best-in-class trading desks did not perform as well as its competitors.
Goldman Sachs posted first-quarter earnings of $5.15 per share and revenue of $8.026 billion.
This quarter, JPMorgan Chase, Citigroup, and Bank of America all posted significant increases in trading revenue - suggesting that rivals are eating Goldman's lunch. Net revenues from underwriting were 37 percent higher year-over-year, at $947 million, which Goldman Sachs attributes to an increase in industry-wide activity, and significantly higher net revenues in debt underwriting.
Shares of Goldman Sachs sank 3 percent in pre-market trading to $219.99. "Isn't good and it happens every once in a while for Goldman, but definitely not the norm".
Morgan Stanley, Goldman's traditional rival, reports earnings on Wednesday. Banks with bigger balance sheets tend to profit not only from financing corporations but from capturing hedging and other markets-related business as well.
"The operating environment was mixed, with client activity challenged in certain market-making businesses and a more attractive backdrop for underwriting in our investment banking franchise", said Lloyd C. Blankfein, chairman and chief executive officer.
Goldman Sachs reported first-quarter earnings Tuesday that missed on both the top and bottom line as trading revenue disappointed.
Overall, Goldman's profit rose 80 percent to $2.2 billion from $1.2 billion in the first quarter of 2016, when sliding commodity prices, worries about the Chinese economy and uncertainty about US interest rates led to weak results across Wall Street. The bank's expenses rose just 15 percent and it paid out a smaller share of its revenue to employees.
Additionally, the revenue in Goldman Sachs investment banking division rose 16% to $1.7 billion.