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Goldman Sachs Q1 Results Down, Yet Top Consensus

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Goldman Sachs Group Inc. (GS), on Thursday, reported lower profit for the first quarter, reflecting a 27% decline in total net revenues. However, both the top and the bottom lines surpassed the Street consensus estimate.

The company's Q1 net income applicable to common shareholders amounted to $3.83 billion or $10.76 per share versus $6.71 billion or $18.60 per share last year.

Total non-interest revenues decreased to $11.1 billion from $16.2 billion in the prior year period. Net interest income was $1.83 billion compared to $1.48 billion previous year.

Total net revenues for the quarter declined 27% to $12.9 billion from $17.7 billion generated a year ago, reflecting significantly lower net revenues in Asset Management and Investment Banking, partially offset by higher net revenues in Consumer & Wealth Management and Global Markets.

Analysts polled by Thomson Reuters expected earnings of $8.82 per share and revenue of $11.83 billion for the quarter. Analysts' estimate typically exclude certain special items.

Annualized return on average common shareholders' equity or ROE was 15.0% and annualized return on average tangible common shareholders' equity or ROTE was 15.8% for the first quarter of 2022.

David Solomon, Chairman and Chief Executive Officer, said, "It was a turbulent quarter dominated by the devastating invasion of Ukraine. The rapidly evolving market environment had a significant effect on client activity as risk intermediation came to the fore and equity issuance came to a near standstill. Despite the environment, our results in the quarter show we continued to effectively support our clients and I am encouraged that our more resilient and diversified franchise can generate solid returns in uncertain markets."

Investment Banking generated quarterly net revenues of $2.41 billion, down 36% from last year, hit by significantly lower net revenues in Underwriting.

Global Markets generated quarterly net revenues of $7.87 billion, up 4% from last year, reflecting strong performances in Equities and Fixed Income, Currency and Commodities or FICC, including record net revenues in FICC financing.

Consumer & Wealth Management generated record quarterly net revenues of $2.10 billion, 21% higher than the first quarter of 2021, reflecting continued strength in both Wealth management and Consumer banking.

Provision for credit losses was $561 million for the first quarter of 2022, compared with a net benefit of $70 million in the first quarter of 2021.

On April 13, 2022, the company's Board declared a dividend of $2.00 per common share to be paid on June 29, 2022 to common shareholders of record on June 1, 2022.

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