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Goldman Sachs’s stock loses ground as profit tops target but revenue falls short on loan-portfolio adjustment for Marcus unit

Goldman Sachs Group Inc.’s stock lost ground in premarket trades after the investment bank’s first-quarter revenue fell short of the consensus estimate, while net income beat the Wall Street forecast.

The company’s latest revenue figure included a previously undisclosed loss of about $470 million from the partial sale of the loan portfolio of its Marcus consumer-banking business and the transfer of the remainder of the portfolio to held-for-sale.

Goldman Sachs

said its first-quarter earnings fell to $3.09 billion, or $8.79 a share, from $3.83 billion, or $10.76 a share, in the year-ago quarter.

First-quarter revenue dipped to $12.22 billion from $12.93 billion.

Analysts expected Goldman Sachs to earn $8.14 a share on revenue of $12.76 billion, according to estimates compiled by FactSet.

Goldman’s results came the same day as Bank of America Corp.

reported stronger-than-expected profit and revenue.

CEO David Solomon said the company turned in a “solid” performance despite turmoil in the banking sector in March following the collapse of Silicon Valley Bank

and efforts by the banking system to shore up deposits at First Republic Bank

“The events of the first quarter acted as another real-life stress test, demonstrating the resilience of Goldman Sachs and the nation’s largest financial institutions,” Solomon said.

Solomon credited Goldman’s “deeply rooted risk-management culture, strong liquidity and robust capital position” for allowing it to support its clients during the quarter.

Fixed-income net revenue fell 17% to $3.93 billion, which reflected lower net revenue in FICC intermediation. The business also reported lower net revenues in currencies and commodities, partially offset by “significantly higher” interest-rate-product revenue and higher revenue in mortgages and credit products.

Goldman’s $470 million loss from the sale of its Marcus loan portfolio was largely offset by a related reserve reduction of about $440 million in its provision for credit losses.

Global banking and market revenue fell 16% to $8.44 billion. Investment-banking fees fell 26% to $1.58 billion. Revenue in equities fell 7% to $3.02 billion. Asset- and wealth-management revenue rose 24% to $3.22 billion.

Prior to Tuesday’s move, Goldman Sachs’s stock was down 1% in 2023, compared with an 8.1% rise by the S&P 500

Read on: Bank earnings ‘off to a good start,’ with Bank of America and Goldman Sachs on deck

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