Goldman Sachs Group Inc. (NYSE: GS), one of the most influential Wall Street banks, said Tuesday that first-quarter profit Plunged 60 percent. But profit still topped analysts’ estimate as the company lowered expenses to compensate for falling revenue.
The New York-based bank said that first-quarter net income fell 60 percent to $1.14 billion, or $2.68 a share, compared with $2.84 billion, or $5.94 a share, a year earlier. The result beat analysts estimate. 23 Analysts surveyed by Bloomberg had projected a earning of $2.48 per share.
Revenue fell 40 percent to $6.34 billion, felling short of the average estimate of $6.69 billion. This is the lowest first-quarter revenue for Goldman since Lloyd Blankfein became the Chief Executive Officer in 2006.
“The operating environment this quarter presented a broad range of challenges, resulting in headwinds across virtually every one of our businesses," Lloyd Blankfein, chairman and CEO, said in a statement.
Volatile markets in the early year resulted in the huge drop in revenue. Revenues in fixed income, currency and commodities fell 47 percent to $1.66 billion. Revenues from equities trading also dropped 23 percent to $1.78 billion. The company’s institutional client services unit also reported a 37 percent drop in revenue.
The firm cut costs deeper to compensate for the falling revenue. Operating expenses fell 29 percent from a year earlier to $4.76 billion. On-compensation expenses declined 6 percent to $2.10 billion, the lowest for a three-month period in almost seven years, according to the statement.
Goldman is the last big bank to report first quarter earning. Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and Morgan Stanley all reported their earning results that top analyst’s estimates while their revenue also fell sharply.
Goldman shares rose 2 percent to $162.26 at 11:32 A.M. in New York.