Goldman Sachs Profit Dips 72 Percent

Published by: Mike Goldman on 19th Apr 2011 | View all blogs by Mike Goldman

Goldman Sachs Profit Dips 72 Percent

Goldman Sachs Group Inc. posted its first-quarter results Tuesday, posting a 72 percent decline in profits to common shareholders as its revenue from bond trading plummeted. The largest of the United States' investment banks, Goldman posted a profit to common shareholders of $908 million, or $1.56 per share, compared with a profit of $3.3 billion, $5.59 per share, in the first quarter of 2010.

While earnings were well below previous results for the bank, they nevertheless nearly doubled estimates of analysts in a recent Thomson Reuters, who had forecast earnings of 82 cents per share, on average. The company's revenue in the quarter was $11.89 billion, 6.9 percent below the year-ago period but ahead of the consensus $10.18 billion estimated by analysts. Among Goldman's best performing segments in the quarter were its investing-and-lending branch and its investment management business.

The bank's client trading declined in the period, which analysts had expected given the surge in fixed income, currency, and commodities trading at the beginning of 2010. The firm's net revenue in FICC trading was down 28 percent from the first three months of 2010. Goldman also had enough available cash in the quarter to repurchase Warren Buffet's preferred stock in the firm, and buy back $1.47 billion worth of its shares during the quarter.

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