Shares of Goldman Sachs fell after the company announced its first-quarter earnings report. The earnings report fell short of investor expectations due to the tough market and trading conditions.
Revenue fell 13 percent to $8.81 billion, falling below the $8.9 billion estimates. However, the firm did generate $5.71 per share, exceeding investor expectations of $4.89 per share. This was mostly due to the firm cutting employee compensation and benefits by 20 percent.
However, CFO Stephen Scherr says there are no new changes in employee compensation. This will likely something the firm will have to make up for later in the year.
What to expect from Goldman Sachs
The firm saw several areas of the company decline in revenue, including its client services trading division. This is the biggest aspect of business for the company by far and it saw an 18 percent drop from a year earlier.
The investing and lending segment and the investment management division also experienced a significant drop in revenue. But Scherr encouraged analysts to consider the firm’s overall investments and expenses as well.
In spite of the disappointing earnings report, there is still much to be hopeful about for Goldman Sachs in the future. For instance, Goldman Sachs is investing in new platforms that focus on both corporate and consumer businesses.
Just last month, the firm announced it’s partnering with Apple on the upcoming Apple card. Though the details of that deal are still unclear, this should help the bank expand its consumer banking business significantly.
Goldman Sachs is still one of the six biggest banks in the U.S. and is heavily influenced by Wall Street activities. This contributed to its rocky first quarter results.
But Goldman Sachs CEO David Solomon said the firm was pleased with their earnings report, particularly after a rough start at the beginning of 2019. Solomon says the firm is focused on growing its existing businesses and diversifying with new products and services.
Solomon has previously stated that the firm has a plan to increase revenue by $5 billion over the next three years. So at some point, there may be more details revealed about that growth plan.