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Goldman Sachs earnings plunge 42% despite strong trading earnings

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Goldman Sachs on Thursday reported first-quarter results that beat analysts’ expectations — even though the bank’s profit fell 42% year over year.

The Wall Street giant reported a plunge in advisory fees as IPOs and mergers fell sharply from last year’s breakneck pace. And that’s despite robust trading earnings as traders found ways to profit amid geopolitical uncertainty.

“It was a turbulent quarter dominated by the devastating invasion of Ukraine,” Chief Executive David Solomon said in a statement. “The rapidly evolving market environment had a significant impact on client activity as risk brokerage took center stage and equity issuance all but dried up.”

Goldman posted revenue of $12.93 billion and earnings of $10.76 per share — well above analysts’ forecasts of $11.86 billion in revenue and earnings, according to data from FactSet of $8.90 per share.

The bank’s total profit was $3.94 billion. Shares rose nearly 2% after the gains.

Goldman, which typically derives a third of its revenue from its investment bank from lucrative fees from advising on deals, brought in $2.41 billion in fees — down 36% from the prior-year first quarter.

But investment banking’s disappointing performance was offset by the bank’s trading revenue, which was up 4% year over year to bring in $7.87 billion. Revenue from trading fixed income, currencies and commodities alone brought in $4.72 — up 21% from a year ago.

JPMorgan, the country’s largest company, reported on Wednesday that earnings also fell 42% year over year.

https://nypost.com/2022/04/14/goldman-sachs-profit-slumps-42-despite-strong-trading-revenue/ Goldman Sachs earnings plunge 42% despite strong trading earnings

DUSTIN JONES

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