Goldman Sachs Q1 Net Income Down 60% as Banking, Trading Revenues Fall
Roger Yu
USA TODAY 9:33 a.m. EDT
April 19, 2016
Goldman Sachs Group, one of the most influential investment banks on Wall Street, said Tuesday its first-quarter net income fell 60% from a year ago as demand for its main business lines, investment banking and trading, tumbled.
Net income totaled $1.14 billion, or $2.68 a share, beating $2.50 estimated by analysts polled by S&P Global Market Intelligence.
Revenue for the quarter plummeted 40% from a year ago to $6.34 billion. Analysts estimated $6.52 billion.
“The operating environment this quarter presented a broad range of challenges, resulting in headwinds across virtually every one of our businesses,” said CEO Lloyd Blankfein. “Looking ahead, we will continue to focus on delivering superior service to our clients and managing our business efficiently, which remain essential to generating shareholder value over the long term.”
Shares fell 1.1% to $157.33 in morning trading.
Revenue for the investment banking unit, which helps clients with mergers and acquisitions and issuing new securities, fell 23% to $1.46 billion. The unit's financial advisory business generated $771 million in revenue, 20% lower than a year ago as it completed fewer mergers and acquisitions.
Underwriting revenue also decreased 27% to $692 million as its clients conducted fewer equity deals. It reflected "low levels of industry-wide activity during the quarter," Goldman Sachs said. But its debt underwriting revenue rose 23% to $509 million due to an increase in investment-grade activity.
Institutional client services, Goldman Sachs' largest business unit than handles trading of stocks, bonds, currency and commodities, reported a 37% revenue drop to $3.44 billion as trading sales and volume fell.
Revenues in fixed income, currency and commodities fell 47% to $1.66 billion. The business "operated in a challenging environment characterized by economic uncertainty and difficult market-making conditions, which resulted in significantly lower net revenues across all major businesses compared with the first quarter of 2015," Goldman Sachs said in a prepared statement.
Revenue from equities trading was $1.78 billion for the first quarter, a 23% drop stemming from the sluggish stock market conditions so far this year and global economic uncertainty.
USA TODAY 9:33 a.m. EDT
April 19, 2016
Goldman Sachs Group, one of the most influential investment banks on Wall Street, said Tuesday its first-quarter net income fell 60% from a year ago as demand for its main business lines, investment banking and trading, tumbled.
Net income totaled $1.14 billion, or $2.68 a share, beating $2.50 estimated by analysts polled by S&P Global Market Intelligence.
Revenue for the quarter plummeted 40% from a year ago to $6.34 billion. Analysts estimated $6.52 billion.
“The operating environment this quarter presented a broad range of challenges, resulting in headwinds across virtually every one of our businesses,” said CEO Lloyd Blankfein. “Looking ahead, we will continue to focus on delivering superior service to our clients and managing our business efficiently, which remain essential to generating shareholder value over the long term.”
Shares fell 1.1% to $157.33 in morning trading.
Revenue for the investment banking unit, which helps clients with mergers and acquisitions and issuing new securities, fell 23% to $1.46 billion. The unit's financial advisory business generated $771 million in revenue, 20% lower than a year ago as it completed fewer mergers and acquisitions.
Underwriting revenue also decreased 27% to $692 million as its clients conducted fewer equity deals. It reflected "low levels of industry-wide activity during the quarter," Goldman Sachs said. But its debt underwriting revenue rose 23% to $509 million due to an increase in investment-grade activity.
Institutional client services, Goldman Sachs' largest business unit than handles trading of stocks, bonds, currency and commodities, reported a 37% revenue drop to $3.44 billion as trading sales and volume fell.
Revenues in fixed income, currency and commodities fell 47% to $1.66 billion. The business "operated in a challenging environment characterized by economic uncertainty and difficult market-making conditions, which resulted in significantly lower net revenues across all major businesses compared with the first quarter of 2015," Goldman Sachs said in a prepared statement.
Revenue from equities trading was $1.78 billion for the first quarter, a 23% drop stemming from the sluggish stock market conditions so far this year and global economic uncertainty.
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