Lending The Ticker

Goldman Sachs posts rare miss in first-quarter earnings

Bank lays low in residential mortgages

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Goldman Sachs recorded a rare and unexpected miss in first-quarter earnings, according to an article by Evelyn Cheng in CNBC.

The megabank missed earnings expectations in both earnings per share and revenue, causing its stock to fall to its lowest level in nearly five months, the article stated.

According to the article, Goldman Sachs posted an EPS of $5.15 a share versus $5.31 a share expected by Thomson Reuters analysts' consensus, and it posted revenue of $8.026 billion versus $8.446 billion expected by that same consensus.

From the article:                                                          

Heading into Tuesday's report, Goldman had topped Wall Street's earnings estimates 90 percent of the time when reporting quarterly results over its history as a public company, according to Bespoke Investment Group. The last time Goldman reported a miss on earnings per share was the fourth quarter of 2015.

"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," Chairman and CEO Lloyd C. Blankfein said in a release.

In the fourth quarter 2015, Goldman Sachs reported net revenues of $8.17 billion, up from the third quarter’s $8.168 billion and up 12% from $7.27 billion in the fourth quarter of 2015.

While Goldman Sachs doesn’t doesn't have a large footprint in residential mortgages, it has turned into a major buyer of non-performing loans from Fannie Mae as part of its settlement with the government that requires it to help struggling homeowners.

 

Source: CNBC
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