Goldman Sachs Group Inc. (GS) reported a profit for the first-quarter that dropped 49 percent from the prior year, reflecting higher provision for credit losses. Quarterly revenue declined 1 percent.
In Wednesday pre-market trade, GS is trading at $174.50 , down $3.82 or 2.14 percent.
The company declared a dividend of $1.25 per common share to be paid on June 29, 2020 to common shareholders of record on June 1, 2020.
Net earnings applicable to common shareholders for the first-quarter dropped 49 percent to $1.12 billion from the previous year’s $2.18 billion, with earnings per share declining to $3.11 from $5.71 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $3.35 per share for the quarter. Analysts’ estimates typically exclude special items.
Provision for credit losses was $937 million for the first quarter of 2020, compared to $224 million for the first quarter of 2019. The increase was primarily due to significantly higher provisions related to corporate loans as a result of continued pressure in the energy sector and the impact of COVID-19 on the broader economic environment.
Net revenues for the quarter declined 1 percent to $8.74 billion from the prior year’s $8.81 billion, reflecting significantly lower net revenues in Asset Management, largely offset by significantly higher net revenues in Global Markets, Investment Banking and Consumer & Wealth Management. Analysts expected revenues of $7.92 billion for the first-quarter.
Net revenues in Asset Management were negative $96 million compared to positive $1.79 billion for the first quarter of 2019. The decrease reflected significant net losses in Lending and debt investments and net losses in Equity investments. These decreases were partially offset by significantly higher Incentive fees and higher Management and other fees from the firm’s institutional and thirdparty distribution asset management clients.
Net revenues in Investment Banking were $2.18 billion for the first quarter of 2020, 25% higher than the first quarter of 2019, due to higher net revenues in Corporate lending and Underwriting, partially offset by lower net revenues in Financial advisory.
Net revenues in Global Markets were $5.16 billion for the first quarter of 2020, 28% higher than the first quarter of 2019.
Net revenues in Consumer & Wealth Management were $1.49 billion for the first quarter of 2020, 21% higher than the first quarter of 2019.
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