Goldman Sachs (NYSE:GS) on Wednesday said first-quarter profit dropped 46% as the coronavirus pandemic wiped out results in its asset management division.
The bank said it earned $1.21 billion in the quarter, or $3.11 a share, missing the $3.35 estimate of analysts. While results were dragged down by losses in debt and equity holdings housed in the asset management business, the firm’s trading division exceeded expectations, helping companywide revenue of $8.74 billion top the $7.92 billion estimate.
CEO David Solomon said the firm was "inevitably affected by the economic dislocation" tied to the pandemic and that "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."
Trading results increased because of the market volatility. Fixed income operations posted net revenues of $2.97 billion, the division’s best results in five years. Equities revenues came in at $2.19 billion, the second best quarter in five years.
It appears that, in the first quarter where the industry’s results have been impacted by the coronavirus pandemic, Goldman Sachs is showing it may be slightly more insulated from the turmoil facing its bigger peers.
Goldman has been the only bank to exceed analysts’ expectations for revenue so far. Among the six biggest U.S. banks, Goldman derives the biggest share of its revenue from Wall Street activities including trading and mergers advice.
Goldman shares plummeted $6.54, or 3.7%, in the first hour Wednesday, to $171.69.
