Despite Dip in Profits, Goldman Sachs Group Inc Tops Analyst Expectations

Goldman Sachs (NYSE: GS  ) reported this morning that its earnings per share dipped 6% from $4.29 in the first quarter of 2013 to $4.02 in the first quarter of this year; however, this was well ahead of the $3.45 expected by analysts. In total, net earnings at Goldman Sachs fell from $2.2 billion to $2.0 billion, a decline of 11%.

Goldman Sachs Tower. Source: Flickr / saebaryo.

"We are generally pleased with our performance for the quarter given the operating environment," noted Goldman Sachs Chairman and CEO Lloyd Blankfein in the company's press release. "Investment Banking and Investment Management generated solid results, while market sentiment shifted throughout the quarter, constraining client activity in various parts of our franchise."

Revenue at Goldman Sachs fell by 8%, or approximately $800 million, relative to the first quarter of last year. This was largely the result of decreased revenue from market making and other principal transactions operations, which saw declines of $798 million, or 23%, and $578 million, or 28%, respectively. However, it did see gains in its investment banking and management operations, as well as its net interest income, which helped offset the decline.

The firm did note that the $1.8 billion in revenue seen by its investment banking operations was the highest quarterly result since 2007. This was a 13% improvement over the first quarter of last year, and was driven largely by the increase of its financial advisory revenues, growing by 41% from $484 million to $682 million. In addition Goldman Sachs noted its investment management arm saw $40 billion in record inflows of long-term assets under supervision, bringing its total to $1.1 trillion.

Helping offset the dip in revenue for Goldman Sachs as a whole was a 6% reduction in expenses, which fell by approximately $400 million. This was largely the result of a $300 million drop in compensation and benefits expenses and its insurance reserves dropping from $127 million to $0.

"Our collection of businesses gives the firm significant room for growth as economic conditions broadly improve and we continue to remain focused on prudently managing our capital and cost structure," Blankfein said to conclude his prepared remarks.

link


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2919085, ~/Articles/ArticleHandler.aspx, 10/1/2014 2:06:44 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
DOW 17,042.90 -28.32 -0.17%
S&P 500 1,972.29 -5.51 -0.28%
NASD 4,493.39 -12.46 -0.28%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2014 4:00 PM
GS $183.57 Down -0.26 -0.14%
Goldman Sachs CAPS Rating: ***

Advertisement