Goldman Posts Dismal Earnings; Revenues Lowest Since 2005

Apparently, the vampire squid is really getting hit on all fronts these days, with revenues lower by 40% year over year. If you look at it in the context of how bad Morgan Stanley’s report was, with revenues down 53% yoy, Goldman is doing pretty damn good.

Nevertheless, CEO, Lloyd Blankfein sums of the quarter perfectly.

 “The operating environment … resulted in headwinds across virtually every one of our businesses”

Profits were down 60% for the quarter, yet markets are at all-time highs. Fucking stupid, no?

It’s worth mentioning, last week,  Howard gave us a pretty good heads up at how desperate Goldman is for revenues these days.

 

Via Briefing.com

• Reports Q1 (Mar) earnings of $2.68 per share, $0.18 better than the Capital IQ Consensus of $2.50; revenues fell 40.3% year/year to $6.34 bln vs the $6.52 bln Capital IQ Consensus.
• Annualized return on average common shareholders’ equity (ROE) was 6.4%.
• Investment Banking
  • Net revenues in Investment Banking were $1.46 billion for the first quarter of 2016, 23% lower than the first quarter of 2015 and 5% lower than the fourth quarter of 2015.
  • Net revenues in Financial Advisory were $771 million, 20% lower compared with a strong first quarter of 2015, reflecting a decrease in completed mergers and acquisitions transactions. Net revenues in Underwriting were $692 million, 27% lower than the first quarter of 2015.
  • Net revenues in debt underwriting were significantly higher compared with the first quarter of 2015, primarily reflecting an increase in investment-grade activity.
  • The firm’s investment banking transaction backlog decreased compared with the end of 2015, but was higher compared with the end of the first quarter of 2015.
• Institutional Client Services
• Net revenues in Institutional Client Services were $3.44 billion for the first quarter of 2016, 37% lower than the first quarter of 2015 and 20% higher than the fourth quarter of 2015.
  • Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.66 billion for the first quarter of 2016, 47% lower compared with a strong first quarter of 2015.
  • Net revenues in Equities were $1.78 billion for the first quarter of 2016, 23% lower than the first quarter of 2015. The decrease in equities client execution reflected significantly lower net revenues in both cash products and derivatives.
• Expenses
• Operating expenses were $4.76 billion for the first quarter of 2016, 29% lower than the first quarter of 2015 and 23% lower than the fourth quarter of 2015.
  • The accrual for compensation and benefits expenses was $2.66 billion for the first quarter of 2016, 40% lower than the first quarter of 2015, reflecting a decrease in net revenues.
  • The ratio of compensation and benefits to net revenues for the first quarter of 2016 was 42.0%, unchanged compared with the first quarter of 2015.
• Non-compensation expenses were $2.10 billion for the first quarter of 2016, 6% lower than the first quarter of 2015 and 49% lower than the fourth quarter of 2015.
  • The decrease compared with the first quarter of 2015 reflected lower other expenses, primarily due to lower net provisions for litigation and regulatory proceedings and lower expenses.
• Book value per common share was $173.00 and tangible book value per common share was $163.54, both 1% higher compared with the end of 2015.

GS is down a mere 1% in the pre-market.

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