Goldman Sachs Earnings Fall 23%, Beat Estimates

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Goldman Sachs first quarter net earnings fell 23% to $2.11 billion, still topping analysts' estimates as investment banking recorded better-than-anticipated results.

Goldman (NYSE: GS ) reported earning $4.05 per share, beating the $3.46 estimate from Meredith Whitney and the $3.55 estimate by analysts surveyed by Reuters. The bank earned $2.74 billion in the first quarter of 2010, according to an earnings release issued by the company today, and had an earnings-per-share of $1.66.

Total investment banking revenue declined 9% from the first quarter of 2011 to $1.15 billion. It was up 35% from the end of 2011 and higher than analysts' estimates.


Goldman had a one-time payout last year to Warren Buffett, who received preferred shares in the company. Excluding the payment to Buffett, earnings would have been $4.38 per share.

The largest percentage decrease in revenue came from ordinary shares invested in the Industrial and Commercial Bank of China, which decreased 47% from $316 million to $169 million. The largest increase in revenue was for financial advisor, where Goldman reported a 37% increase to $489 million.

Revenue declined on fixed income, currency and commodity trading for clients, which is 32% of the bank's stock price, the largest of any division, according to an April 6 note from Deutsch Bank (NYSE: DB ). The New York-based bank earned $3.46 billion, down from $4.33 billion a year earlier. The first quarter of 2012 was still more than 2.5 times as much as the $1.36 billion earned in the fourth quarter of 2011.

Fixed income, currency and commodity trading is part of institutional client services, a division which earned $5.71 billion and accounted for more than half of the first quarter revenue.

The board of directors at Goldman voted to raise the quarterly dividend from 35 to 46 cents per share.

Goldman Sachs joined other large banks, Goldman is the fifth-largest US bank in terms of assets, which have also topped analysts' estimates with first quarter 2012 earnings.

JPMorgan (NYSE: JPM ), the largest US bank, earned $5.38 billion in the first quarter, according to a press release issued by the bank Friday. This was down 3% from $5.56 billion in the first quarter of 2011. Earnings per share increased from $1.28 to $1.31, compared to analysts' estimates of about $1.15 per share.

Wells Fargo (NYSE: WFC ) earned $4.25 billion in the first quarter, up from $3.76 billion in the first quarter of 2011. The San Francisco-based bank earned 75 cents per share, up from 67 cents per share a year earlier, according to a press release issued by the bank Friday.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: DB , GS , JPM , WFC

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