pcloudy.png
Tuesday July 16th, 2019 3:01PM

Goldman profits fall 21% from year ago, hurt by trading

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — Goldman Sachs said its first quarter earnings fell by 21% from a year earlier, hurt by a slowdown in trading.

The investment bank earned a profit of $2.25 billion, or $5.71 a share, down from a profit of $2.83 billion, or $6.95 a share, in the same period a year earlier. The results did beat analysts' expectations, however. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $4.74 per share.

Goldman's profits were primarily hurt by their trading desks. Once a place of record profitability for the bank, Goldman's trading desks have struggled under lighter trading combined with periods of extreme volatility that are hard to navigate.

Net revenues in Goldman's fixed income, currency and commodities division was $1.84 billion, down 11% from a year ago. Stock trading was even worse, reporting net revenues of $1.77 billion, down 24%.

David Solomon, Goldman's chairman and chief executive officer, described the quarter as a "muted start to the year," in a written statement.

Other parts of Goldman's businesses struggled as well. The bank reported a 12% decline in net revenues in its investment management businesses, and a 14% decline in net revenues in its investing and lending business.

Goldman has undertaken significant efforts in recent years to diversify the company into new forms of banking and financial services. The bank has a growing consumer banking franchise known as Marcus, which offers high-interest online savings accounts and CDs as well as debt consolidation personal loans. Goldman also recently jumped into the credit card business, becoming the issuing bank for Apple's new credit card.

The bank still does not break out Marcus, or its consumer bank franchise, as a line item on its results. However the bank did see a significant jump in interest income in the quarter, reporting net interest income of $1.22 billion, up 33% from a year earlier.

Goldman's return on tangible equity, a measurement that describes how well a bank is performing with underlying assets, was 11.7%. Banks like Goldman and its competitor Morgan Stanley aim for a return on equity above 10%.

Firm-wide Goldman said it had net revenues of $8.81 billion, down 13% from last year, below analysts' estimates, according to Zachs.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Business - Industries, AP Business - Financial Services, AP Business - Personal Finance
© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
EU agrees terms for limited trade talks with US
The European Union has approved its terms for negotiating a limited trade deal with the United States, setting up a possible show-down with Washington by refusing to include agricultural products in the talks
7:58AM ( 15 minutes ago )
Mainstream retailers embrace marijuana's less taboo cousin
Retailers take advantage of booming CBD industry even as legal status and health benefits of a compound derived from hemp and marijuana remain murky
7:49AM ( 24 minutes ago )
Trump says Boeing should fix, then re-brand Max jets
President Donald Trump is offering some unsolicited advice to Boeing, manufacturer of the 737 Max jet
7:44AM ( 29 minutes ago )
Associated Press (AP)
UK found to be hottest investment destination despite Brexit
Britain found to be top destination for foreign investment despite Brexit as companies prepare for change.
7:02AM ( 1 hour ago )
Removal of fuel in pool at Fukushima's melted reactor begins
The operator of the wrecked Fukushima nuclear plant has begun removing fuel from a cooling pool at one of three reactors that melted down in the 2011 disaster _ a milestone in the decades-long decommissioning of the plant
6:55AM ( 1 hour ago )
Mainstream retailers embrace CBD despite murky status
Retailers are taking advantage of the booming CBD industry even as its legal status and health benefits remain murky
6:53AM ( 1 hour ago )
AP Business
Nevada may be forced to reveal marijuana-license criteria
Nevada may be getting close to opening the books on businesses that sell marijuana in the booming legal marketplace
4:03PM ( 16 hours ago )
Nevada moving closer to unveiling who gets to sell legal pot
Nevada may be getting close to opening the books on businesses that sell marijuana in the booming legal marketplace
11:47AM ( 20 hours ago )
China's auto show highlights electric ambitions
World's biggest auto show highlights China's electric ambitions, pressure on industry to create consumer-friendly models
1:17AM ( 1 day ago )
AP Business - Corporate News
EU agrees terms for limited trade talks with US
The European Union has approved its terms for negotiating a limited trade deal with the United States, setting up a possible show-down with Washington by refusing to include agricultural products in the talks
7:58AM ( 15 minutes ago )
Mainstream retailers embrace marijuana's less taboo cousin
Retailers take advantage of booming CBD industry even as legal status and health benefits of a compound derived from hemp and marijuana remain murky
7:49AM ( 24 minutes ago )
Trump says Boeing should fix, then re-brand Max jets
President Donald Trump is offering some unsolicited advice to Boeing, manufacturer of the 737 Max jet
7:44AM ( 29 minutes ago )
World stocks mostly rise on US-China trade talks, earnings
World stocks are mostly higher after the U.S. and China said they were closing in on a trade deal, but without giving a timeline
7:34AM ( 39 minutes ago )
South Korean president calls for 4th summit with Kim Jong Un
South Korean President Moon Jae-in says he's ready for a fourth summit with North Korean leader Kim Jong Un to help salvage faltering nuclear negotiations between the North and the United States
7:17AM ( 56 minutes ago )