Goldman Sachs falls on revenue miss, profit decline; seen as a 'very messy report'

By Senad Karaahmetovic

Goldman Sachs (NYSE:GS) saw its profit decline in the first quarter while revenue came in below market expectations. As a result, GS shares trade over 3% lower in premarket Tuesday.

Goldman Sachs posted a Q1 EPS of $8.79 to beat the analyst estimate of $8.24. For the same period last year, GS reported an EPS of $10.76. Revenue for the quarter came in at $12.22 billion, missing the consensus estimate of $12.83B.

The company missed the Street estimates for both FICC sales & trading revenue and Global Banking & Markets revenue. Net interest income (NII) came in at $1.78B, a large miss compared to the expected $2.18B.

“The events of the first quarter acted as another real-life stress test, demonstrating the resilience of Goldman Sachs and the nation’s largest financial institutions… We are operating from a position of strength and remain focused on executing our strategy to further grow our leading Global Banking & Markets and Asset & Wealth Management franchises,” said David Solomon, chairman and chief executive officer.

Annualized return on equity (ROE) came in at 11.6%, while the analysts were looking for 11.1%. The Standardized CET1 ratio was 14.8%, missing the 15.1% consensus.

Overall, Goldman Sachs reported $2.67 trillion in assets under management (AUM) at the end of the quarter.

Vital Knowledge analysts said Goldman delivered “a very messy report with a ton of moving pieces.”

“The knee-jerk reaction is negative as the results aren’t nearly as healthy/clean as has been the case w/other money centers,” the analysts said.