Goldman Sachs posts a 46% slump in quarterly profit as Coronavirus weighs on performance

Goldman Sachs (NYSE:GS) released its quarterly financial results before the bell on Wednesday. Beating the analysts’ estimate for revenue in the first quarter but missing on the earnings forecast, the American multinational investment bank is roughly 1.6% down in the premarket trading on Wednesday.

Goldman Sachs’ Financial Results Versus Analysts’ Estimates

According to Refinitiv, analysts had anticipated Goldman Sachs to print £6.33 billion in revenue in the first quarter. In terms of earnings per share (EPS), their estimate was capped at £2.68 per share. In its financial report on Wednesday, the investment bank claimed to have generated a higher £6.99 billion in revenue. Goldman’s revenue in the first quarter last year was recorded at £7.04 billion.

Its EPS, however, came out worse than expected at £2.49 per share. Goldman’s profit in the first quarter marked a massive 46% decline as compared to the same quarter last year.

On the trading revenue front, experts had forecast the bank to generate £1.59 billion from fixed income and another £1.53 billion from equities. The investment banking revenue was estimated at £1.49 billion in the first quarter.

Goldman Sachs, however, announced a significantly higher £2.37 billion in net revenue from fixed-income operations that marked the divisions’ best performance in the past 5 years. Revenue from equities also topped analysts’ estimate and posted at £1.75 billion; its 2^nd best quarterly performance since 2015.

CEO David Solomon’s Comments On Earnings Report

Chairman and Chief Executive Officer, David Solomon of Goldman Sachs commented on the Q1 earnings report and stated:

“Our quarterly profitability was inevitably affected by the economic dislocation. As public policy measures to stem the pandemic take root, I am firmly convinced that our firm will emerge well-positioned to help our clients and communities recover.”

At £143.22 per share, Goldman Sachs is currently around 25% down year to date in the stock market. The stock had dropped to as low as £107.90 per share on March 23^rd. The investment bank has recovered over 30% in the past three weeks.

Its performance in 2019, on the other hand, was recorded fairly upbeat with an annual gain of around 35%. Owing to the Coronavirus driven downward rally, Goldman Sachs is currently trading at around the same level at which it opened last year in January 2019.

Goldman Sachs is currently valued at £49 billion and has a price to earnings ratio of 8.47.