Back to top

Image: Bigstock

Goldman Sachs (GS) Q1 Earnings Lag on Higher Expenses

Read MoreHide Full Article

Have you been eager to see how The Goldman Sachs Group, Inc. (GS - Free Report) performed in Q1 in comparison with the market expectations? Let’s quickly scan through the key facts from this NY-based popular bank’s earnings release this morning:

An Earnings Miss

Goldman came out with earnings per share of $5.15, significantly missing the Zacks Consensus Estimate of $5.38. Higher expenses were primarily responsible for the miss.

How Was the Estimate Revision Trend?

You should note that the earnings estimate revisions for Goldman depicted optimism prior to the earnings release. The Zacks Consensus Estimate has climbed 1.1% over the last 7 days.

Also, Goldman has a decent earnings surprise history. Before posting earnings miss in Q1, the company delivered positive surprises in all the prior four quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 15.3% in the trailing four quarters.
 

Revenue Came in Lower Than Expected   
 
Goldman posted revenues of $8.0 billion, missing the Zacks Consensus Estimate of $8.4 billion. However, it compared favorably with the year-ago number of $6.3 billion.

Key Stats to Note:

  • Goldman ranked  first  in  worldwide  announced  and completed mergers  and acquisitions year-to-date
  • Goldman repurchased 6.2 million shares of its common stock for a total cost of $1.50 billion during the quarter and increased common stock dividend by 15.4%
  • Annualized return on average common shareholders’ equity (ROE) was recorded at 11.4%

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for Goldman. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look unfavorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

How the Market Reacted So Far

Following the earnings release, Goldman shares were down more than 2% in the pre-trading session. This is in contrary to what the stock witnessed in the prior-day’s session. Clearly, the initial reaction shows that the investors have not considered the results in their favor. However, the full-session’s price movement may indicate a different picture.

Check back later for our full write up on this Goldman earnings report!

Sell These Stocks. Now.

Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.

See today's Zacks "Strong Sells" absolutely free >>.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


The Goldman Sachs Group, Inc. (GS) - free report >>

Published in