Business

Goldman Sachs, Bank of America Report Q1 Earnings

Goldman Sachs Group reported the smallest increase in fixed-income trading among peers that have reported first-quarter results, citing weaker interest from clients in commodities and currencies. The company has earned $2,255 million, or $5.15 a share in the quarter, compared with $1,135 million, or $2.68 a share for the same period a year ago.

Nevertheless, Kotowski remains bullish on the company despite the earnings miss, noting that Goldman is more volatile on a quarterly basis than other big banks and expects trading to turn around. But the results were well short of analyst forecasts of $5.31 per share, on average, according to Thomson Reuters I/B/E/S.

Investment Management revenues jumped 12% from a year ago to $1.50 billion, but were down 7% sequentially.

The bank's net income for the first three months of the year came in at $4.86bn (£3.82bn), up 40 per cent on the same period last year.

This time, though, Goldman blamed its disappointing results on low volatility in the market-also known as Wall Street's "fear index"-making its customers less interested in trading their portfolios, especially foreign exchange and commodity assets". Ancora Advisors LLC bought a new position in Goldman Sachs Group during the fourth quarter valued at $109,000. Atlantic Securities downgraded shares of Goldman Sachs Group from an "overweight" rating to a "neutral" rating and boosted their target price for the stock from $205.00 to $240.00 in a report on Wednesday, December 21st.

"This is a hole, just like previous year started in a hole", Devin Ryan, an analyst at JMP Securities, said in a phone interview.

Goldman's return on equity, a closely watched measure of profitability, stood at 11.4% in the quarter. Credit Suisse Group AG reaffirmed a "buy" rating on shares of Goldman Sachs Group in a research report on Friday, February 10th.

Goldman's trading desks struggled in the first quarter, a sharp contrast to its competitors who all reported gains in trading last quarter and set investors' expectations that Goldman would perform just as well or better. That also missed analysts' expectations of $8.37 billion.

The firm also recently announced a quarterly dividend, which was paid on Thursday, March 30th. Almost every one of Goldman's major businesses did worse on a year-over-year basis, leading many to wonder whether Goldman's businesses, which rely more heavily on its investment-banking and trading-roots, were fundamentally challenged. FMR LLC now owns 9,910,801 shares of the investment management company's stock valued at $2,373,141,000 after buying an additional 3,722,471 shares in the last quarter.



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