Goldman Sachs made the first quarter profit that exceeded analysts' expectations, while company sales lost to tougher market conditions for two of the company's main divisions.
The company's investment bank division had a turnover of $ 1.81 billion, roughly unchanged from the previous year, as the firm's advisory revenue jumped 51% to $ 887 million on robust mergers and acquisition activity. It immediately exceeded the $ 744 million estimate.
The company's Investing and Lending segment amounted to $ 1.84 billion in revenue, a 14 percent decline that was just shy of analysts "$ 1.87 billion estimate. The drop was driven by" significantly lower net gains "from the efforts of private equity and debt holdings.
But It was in Goldman's smallest division, Investment Management, where the results missed analysts 'expectations with the largest margin, revenue fell by 12% to $ 1.56 billion, below analysts' estimate of 1.71 billion US dollars, on "significantly lower incentive fees and lower transaction revenues" among tough markets.
Given the impact of tough trading and markets on sales in the quarter, Goldman made a handle: It lowered compensation for its employees. The bank booked $ 3.26 billion in salaries and benefits for the quarter, well below the $ 3.58 billion estimate.
The bank's board voted to increase the quarterly dividend by 5 cents to .85 cents per share, a move that had been expected by investors.
Only the second quarter of Solomon runs the bank, but analysts will have many questions for him.
The investment bank, which historically counted governments, corporations and hedge funds as clients, took a remarkable step in its journey to consumers financing last month when its joint credit card with Apple was announced. Analysts want to know what the economy of the deal means to the New York bank.
Nevertheless, by the six largest US banks, Goldman is the most dependent on Wall Street activities, and that means analysts will know how the firm's trading business went in the quarter. JP Morgan Chase said last week that trading sales in the first quarter dropped 17 percent to $ 5.5 billion.
Salomon or CFO Stephen Scherr may also provide updates on a strategic review announced in October and progress on the bank's $ 5 billion revenue improvement plan, according to Barclays analyst Jason Goldberg.
Another discussion topic may be the bank's 1MDB scandal. Goldman's shares were beaten last year due to the trial, where an ex-Goldman partner admitted to helping a Malaysian financier to plunder a billion dollar investment fund.
The shares have been partially recovered this year, climbing over 20 percent.
This is what Wall Street expected:
Earnings: $ 4.89 per share, down 30% from the previous year, according to Refinitiv.
Revenue: $ 8.9 billion, down 10% from the previous year.
] Trading revenues: shares NOK 1.81 billion; Fixed income $ 1.77 billion, according to FactSet
Investment Bank: $ 1.65 billion