Goldman Sachs' profits miss forecasts as trading struggled

Goldman's profit rose from a hard year-ago quarter, with earnings per share of $5.15 versus $2.68 in the first quarter of 2016. Trading revenues in bonds, currencies and commodities was effectively flat in quarter while trading revenues for stocks were down 6 percent from a year earlier.

NEW YORK (AP) - Goldman Sachs had a rare miss in its first quarter results, the bank said Tuesday, as its typically best-in-class trading desks did not perform as well as its competitors.

A noteworthy decline in Fixed Income, Currency, and Commodities (FICC) income stunned analysts, as the company reported earning just $1.69 billion from trading activities, down from $2 billion in the prior quarter. The average estimate of 17 analysts surveyed by Bloomberg was for adjusted earnings of $5.34 a share.

Goldman's results were particularly poor when compared to Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), and Citigroup (NYSE:C), all of which reported improvements in trading revenue. In more recent years, the business has come under pressure from factors including weak market activity and new regulations that restrict what USA banks can do and how much capital they must hold against trades. While Goldman shares soared on investors' hopes that Trump would slash costly financial regulations and spur economic growth that would lift interest rates, the bank's first-quarter earnings illustrated that the President's promises have not yet been a silver bullet for Wall Street. Its closely watched compensation-to-revenue ratio was 41 percent in the first quarter, down from 42 percent a year earlier, but higher than the 38 percent ratio it reported for all of 2016.

The bank's revenue also missed market expectations slightly, which had been projected at $22.6 billion for the January-March period this year.

Goldman shares were down 2.8 percent at $219.95 in premarket trading. The Goldman Sachs Group Inc. reports earnings Tuesday, April 18, 2017.

Net income was $2.26 billion, or $5.15 a share, the firm said in a statement Tuesday.

Revenue during the quarter grew 26.63 percent to $8,026 million from $6,338 million in the previous year period.

Goldman Sachs also announced the repurchase of an addition 50 million shares of common stock and raised its quarterly dividend to 75 cents from 65 cents per common share.

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