Unlike the other big banks, Goldman’s earnings release is a breeze: since the bank has virtually no balance sheet to use as a source of income (or loss), it is all about the income statement. And it was here that there was a big surprise, because despite expectations of a blowout result, with whisper numbers well above consensus estimates, Goldman unexpectedly disappointed, reporting Q1 revenues of $8.03BN, below the $8.53BN expected, translating to EPS of $5.15, fractionally below the $5.17 estimate, which nonetheless was 92% higher compared to EPS of $2.68 reported one year ago.
Unlike other banks Goldman did not benefit as much from a pick-up in trading activity during the period: net revenues from the institutional client services division were up 25% from a year earlier to $3.4bn, below the $3.62bn expected, of which FICC contributed $1.685 billion, which also missed expectations of a $2 billion number.
Despite the miss in FICC, Goldman reported beats in virtually every other revenue line time,
“The operating environment was mixed, with client activity challenged in certain market-making businesses and a more attractive backdrop for underwriting in our investment banking franchise,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer. “As the economy improves, we are well positioned to not only meet our clients’ diverse needs, but also to generate operating leverage for our shareholders.”
Broken down by key operating group, most segments reported numbers that beat expectations with the exception of FICC:
The full breakdown of Goldman’s various revenue segments is shown in the chart below:
