Global Courant 2023-04-18 09:01:01
David Solomon, CEO of Goldman Sachs Group Inc., at a Bloomberg Television address at the Goldman Sachs Financial Services Conference in New York, U.S., on Tuesday, December 6, 2022.
Michael Nagel | Bloomberg | Getty Images
Goldman Sachs is scheduled to report first-quarter results before opening bell Tuesday.
Here’s what Wall Street expects:
Earnings: $8.10 per share, down 25% year-over-year, according to Refinitiv. Revenue: $12.79 billion, down 1.1% year-over-year. Trading Income: Fixed Income $4.16 billion, Equities $2.9 billion, per StreetAccount. Investment bank income: $1.44 billion
How did Goldman’s traders perform last quarter?
The answer to that question will determine whether Goldman beats or misses expectations for the first three months of this year.
Unlike its more diversified rivals, Goldman derives most of its revenue from Wall Street activities, which include trade and investment banking. With advisory activity remaining subdued as the IPO window remains largely closed, it’s up to traders to pick up the slack.
Ahead of the quarter, analysts wondered whether the March turmoil — in which two U.S. banks failed and a global investment bank was forced to merge with an old rival — would be a good or bad backdrop for trading.
That question was apparently answered by JPMorgan Chase and Citigroup, both of which beat estimates in part due to better-than-expected fixed income trading. Goldman has one of the largest bond stores on Wall Street, so expectations are high.
So far, big banks have largely outperformed their smaller counterparts this earnings season, helped by an inflow of deposits following the collapse of Silicon Valley Bank. But as retail banking plays a small – and likely shrinking – role at Goldman, there will be a lot more focus on how trading and investment banking fared and what the outlook is for later this year.
Separately, analysts will want to hear what has come of CEO David Solomon’s statement in February that Goldman has “strategic alternativesfor its consumer platform business, which has been interpreted as potentially selling the GreenSky business it recently acquired or offloading credit card partnerships with Apple and others.
And they’ll likely ask for details on Goldman’s role in helping Apple offer new savings accounts; launched the product with a higher interest rate than the bank’s own Marcus product.
Goldman shares are down 1.1% this year before Tuesday, a better result than the nearly 17% fall in the KBW Bank index.
Last week, JPMorgan Chase, Citi group And Wells Fargo all beat earnings expectations amid rising interest rates. Morgan Stanley is scheduled to release the results on Wednesday.
This story is evolving. Check back later for updates.
