Goldman Sachs (NYSE:GS) posted first-quarter results Tuesday that missed analysts’ expectations for revenue after taking a $470 million hit tied to the sale of consumer loans.
The banking behemoth reported earnings of $8.79 a share vs. $8.10 estimate. This, on revenues of $12.22 billion vs. $12.79 billion
The bank said earnings fell 18% to $3.23 billion, or $8.79 a share, topping the estimate of analysts.
That EPS beat was also driven by Goldman’s loan sale because offloading the debt allowed it to release $440 million in reserves for loan losses, which added roughly $1.20 per share to earnings, Mike Mayo of Wells Fargo said in a research note.
Companywide revenue fell 5% to $12.22 billion, below estimates on the consumer loan hit and weaker-than-expected bond trading and asset and wealth management results.
Unlike its more diversified rivals, Goldman gets the majority of its revenue from Wall Street activities, primarily trading and investment banking. Heading into the quarter, analysts wondered whether turmoil during March — in which two American banks failed and a global investment bank was forced to merge with a longtime rival — would provide a good or bad backdrop to trading.
Fixed income trading revenue fell 17% to $3.93 billion, roughly $230 million below the StreetAccount estimate, on lower activity in currencies and commodities. Equities trading revenue slipped 7% to $3.02 billion, edging out the $2.9 billion estimate.
GS lost $10.69, or 3.5%, to $329.00.
