Goldman Sachs earnings beat, but earnings are lost. The stock falls.
Goldman Sachs beat analysts’ expectations for first-quarter earnings, although revenue was lower than analysts’ estimates.
The bank reported earnings of $8.78 per share on revenue of $12.22 billion in the first quarter. Analysts surveyed by FactSet had expected earnings of $8.14 per share on revenue of $12.76 billion.
Goldman Sachs shares fell 1.4% in the US premarket after earnings were released early Tuesday, after trading 1.9% higher earlier.
This is breaking news. Read a preview of Goldman Sachs earnings below and check back for more analysis soon.
Goldman Sachs and other major US banks are kicking off their first-quarter earnings season just a month after concerns over the health of the sector rocked markets, putting results in an even brighter spotlight than usual.
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Goldman Sachs (ticker: GS ) results are expected before the open on Tuesday. The bank is expected to report earnings of $8.14 per share on revenue of $12.76 billion, based on estimates from analysts surveyed by FactSet.
Net interest income – a key measure of profits that measures the difference between interest earned on loans and paid on deposits – is expected to rise to $2.11 billion from $2.07 billion by the end of 2022. Investment banking revenue, meanwhile, is seen falling to 1 .44 billion from $1.87 billion in the fourth quarter last year — perhaps a symptom of the deal slowing amid last month’s turmoil.
The March panic over banks – hot on the heels of the collapse of three US lenders, including Silicon Valley Bank, the biggest to fail since the 2008-09 financial crisis – was largely confined to regional groups. Still, results from Goldman and its Wall Street peers will continue to be scrutinized by investors for what they say about dynamism in the troubled sector as well as the health of the broader U.S. economy.
Goldman is in good company, and will announce results along with Bank of America ( BAC ) and before Morgan Stanley ( MS ) on Wednesday. JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo
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( WFC ) got the ball rolling with earnings last Friday — impressing analysts and revealing that problems at smaller banks appear to have been contained.
One element to watch in Goldman’s results is whether the bank, like peers including JPMorgan, saw deposit flows in March as clients moved money from smaller banks to the Wall Street giants, seen as stronger and more tightly regulated.
How much money Goldman sets aside for default – provisions for credit losses – will also be in focus amid concerns about how the rapid rise in interest rates is feeding through to the real economy. Any outlook from the bank will also get investors’ attention, as well as guidance that touches on the prospect of a credit crunch.
Write to Jack Denton at jack.denton@barrons.com
