Goldman Sachs shares dip after Wall Street bank misses analyst expectations despite 80 per cent profit jump

 
William Turvill
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Goldman Sachs Profits Fall 70 Percent
Goldman's profits soared, but earnings and revenues missed expectations (Source: Getty)

Shares in Goldman Sachs dipped three per cent in pre-market trading today after the bank reported first-quarter results below expectations.

However, Goldman became the latest Wall Street giant to report a huge leap in profits, boosted by the so-called “Trump bump” and higher interest rates.

Read more: Wall Street awaits results from three more big banks this week

The figures

Net earnings applicable to common shareholders came in at $2.16bn (£1.7bn), up 80 per cent from $1.2bn in the first quarter of last year.

Goldman reported net revenues of $8.03bn, below the $8.45bn expected by an analysts’ consensus by Yahoo Finance. Turnover was up from $6.34bn in the first quarter of 2016, but down from $8.17bn on the last quarter.

Net earnings, meanwhile, came in at $2.26bn for the first three months of the year.

Diluted earnings per share were $5.15, which is up from $2.68 in the first quarter of 2016 and $5.08 in the fourth quarter of last year, but below the $5.31 expected by analysts.

At the time of writing, Goldman Sachs’ shares were down three per cent in pre-market trading, at $219.64.

Read more: What to expect from US banking results tomorrow

Why it’s interesting

Goldman follows JP Morgan Chase and Citigroup in reporting a profit jump in the first quarter.

Wall Street banks have been boosted by the election of Donald Trump and higher interest rates in the US.

But while JP Morgan and Citigroup both reported 17 per cent jumps in profit last week, troubled Wells Fargo’s earnings were flat.

Goldman’s “operating environment was mixed”, the company said today. While investment banking revenues were up 16 per cent to $1.7bn, revenue from the bank’s trading division came in at $3.36bn, down two per cent.

What the company said

Chief executive Lloyd Blankfein:

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… As the economy improves, we are well positioned to not only meet our clients’ diverse needs, but also to generate operating leverage for our shareholders.

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