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On Tuesday, Goldman Sachs released its earnings from Q1 2017. Overall, the bank reported revenues of $8.03 billion, and net earnings of $2.26 billion at the end of the quarter on March 31.
However, the bank still failed to meet Wall Street expectations. According to an article on CNBC by Evelyn Cheng, Goldman Sachs stock value hit its lowest point in nearly five months. Thomson Reuters had predicted Goldman Sachs share value to be $5.31 a share, and the actual value was $5.15 a share. Additionally, Thompson Reuters predicted revenue of $8.45 billion, which the banks actual revenue of $8.03 billion failed to meet.
The bank’s investment department posted $1.7 billion in revenue in Q1 2017, a 16 percent increase over Q1 2016, and 15 percent higher than Q4 2016. Net revenues from underwriting were 37 percent higher year-over-year, at $947 million, which Goldman Sachs attributes to an increase in industry-wide activity, and significantly higher net revenues in debt underwriting.
Goldman Sachs reported $1.46 billion in net revenue from the Investing and lending department, a large increase from Q1 2016, though unchanged from Q4 2016. The bank states that the high revenue in this area is due to a significant increase in net gains from investments in both private and public equities, which were positively impacted by corporate performance and an increase in global equity prices.
Investing and lending produced $666 million in net revenue from debt securities and loans, the highest quarterly performance in four years.
Goldman Sach’s operating expenses were 15 percent higher both year-over-year and quarter-over-quarter, totaling $5.49 billion in Q1 2017.
“The operating environment was mixed, with client activity challenged in certain market-making businesses and a more attractive backdrop for underwriting in our investment banking franchise,” said Lloyd C. Blankfein, Goldman Sachs Chairman and CEO. “As the economy improves, we are well positioned to not only meet our clients’ diverse needs, but also to generate operating leverage for our shareholders.”
