Goldman Sachs reported a rare miss in its first quarter results, the bank said on Tuesday, as its trading desks did not perform as well as its competitors. Net revenue $8.03 billion compared with $6.34 billion in the same period a year earlier. That also missed analysts’ expectations of $8.37 billion. The bank’s stock was down 3% in pre-market trading.
Goldman Sachs earned $2.16 billion compared with $1.2 billion in the same period a year earlier. On a per-share basis, Goldman Sachs earned $5.15 a share versus $2.68 a share in the same period a year earlier. But Goldman’s results were well below the $5.31 a share expected by analysts, according to FactSet. In a statement, Goldman Sachs Chairman and CEO Lloyd Blankfein called the quarter “mixed” and that client activity was “challenged.”
Unlike its competitors, Goldman’s trading desks struggled in the first quarter. The bank’s trading division had net revenue of $3.36 billion in the first quarter, down 2 percent from a year earlier and down 7 percent from the fourth quarter. Trading revenues in bonds, currencies and commodities was effectively flat in quarter while trading revenues for stocks were down 6 percent from a year earlier.
Analysis: One possible/potential reason that Goldman Sachs Q1 2017 Results missed expectations with weak results in stock trading business, could be that its trading desks were running short in a rising market, because anybody with sufficient net long positions in the S&P500 index has made good money in Q1 2017.