Goldman Sachs profits fell 46% last quarter as coronavirus rattled markets
- Goldman Sachs reported first-quarter earnings Wednesday morning that came in below analyst estimates as the firm grappled with the coronavirus outbreak.
- Quarterly revenue landed above Wall Street's hopes as trading businesses surged on heightened market volatility.
- The period's profit was "inevitably affected by the economic dislocation" driven by the coronavirus pandemic, CEO David Solomon said.
- Goldman shares traded roughly 2% lower on the news.
- Watch Goldman Sachs trade live here.
Goldman Sachs announced first-quarter earnings on Wednesday that fell below analyst expectations as the coronavirus battered the markets and the global economy.
The bank's shares slid about 1.3% in early trading.
Here are the key numbers:
- Revenue: $8.74 billion, versus the $7.84 billion estimate
- Earnings per share: $3.11, versus the $3.28 estimate and $5.71 in the year-ago period
- Investment-banking revenue: $2.18 billion, versus the $1.54 billion estimate
- Equities sales and trading revenue: $2.19 billion, versus the $2.05 billion estimate
- Fixed-income sales and trading revenue: $2.97 billion, versus the $2.31 billion estimate
"Our quarterly profitability was inevitably affected by the economic dislocation," CEO David Solomon said in the report. "As public policy measures to stem the pandemic take root, I am firmly convinced that our firm will emerge well-positioned to help our clients and communities recover."
Revenue bested estimates as several of its trading segments soared on increased market volatility. Of the major Wall Street banks, Goldman takes in the biggest share of its revenue through trading and deal advising.
Goldman's report follows a fourth-quarter performance marred by a $1.09 billion litigation expense. The charge pushed earnings per share below analysts' lowest estimate, though quarterly revenue bested expectations.
The report is among the first to reveal how hard the coronavirus pandemic has hammered corporate performance. The related economic shutdowns have driven weekly jobless claims to record highs and prompted most economists to forecast an economic recession lasting until at least the second half of 2020.
Government relief loans are now flowing through banks to businesses struggling amid the downturn, pushing credit health lower and forcing firms to take on greater amounts of risky debt.
The investment bank's report follows Monday releases from industry peers Wells Fargo and JPMorgan. Both firms saw revenue and earnings slide below analyst hopes as recession risks mounted and banks shored up cash reserves. Wells Fargo shares dipped as much as 5.7%, while JPMorgan slid as much as 4.5% in Monday trading.
Goldman closed at $178.23 per share on Tuesday, down roughly 22% year-to-date.
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