(Bloomberg News) Goldman Sachs Group Inc., the fifth-biggest U.S. bank by assets, said profit fell 23 percent as revenue from trading bonds, currencies and commodities lagged behind Citigroup Inc. and JPMorgan Chase & Co.
First-quarter net income dropped to $2.11 billion from $2.74 billion a year earlier, the New York-based bank said today in a statement. Earnings per share of $3.92 beat the $3.55 average estimate of 24 analysts surveyed by Bloomberg. The bank boosted its quarterly dividend 31 percent to 46 cents a share, the first increase since 2006.
Goldman Sachs, led by Chief Executive Officer Lloyd C. Blankfein, reported a 20 percent decline in fixed-income trading revenue to $3.46 billion. JPMorgan, the biggest U.S. bank, said last week revenue from that business fell 11 percent to $4.66 billion and Citigroup, No. 3 by assets, yesterday reported a 4 percent drop in fixed-income trading to $3.65 billion.
"Although earnings actually beat consensus, I think that the results look somewhat disappointing in comparison with the strong numbers we've seen out of JPMorgan and Citigroup," Richard Staite, an analyst at Atlantic Equities LLC in London, said in a telephone interview. "The market had perhaps hoped for a real blow-out quarter from Goldman Sachs."
Goldman Sachs fell to $116.81 in New York trading from $117.73 at the close yesterday. The stock is up 30 percent this year through yesterday. It declined 46 percent in 2011, the second-worst annual performance since Goldman Sachs went public in 1999, as profit slid to the lowest level since 2008.
Blankfein, who began cutting costs in 2011 as revenue declined for the second straight year, is banking on international expansion and a market rebound to restore profit growth. Gains in stock and corporate debt markets boosted total trading revenue 87 percent from the fourth quarter.
Blankfein, 57, and President Gary D. Cohn, 51, were criticized by former derivatives salesman Greg Smith in a New York Times opinion piece last month for presiding over what Smith called a decline in the firm's commitment to client service. In a memo sent to current and former employees, Blankfein and Cohn said Smith's view of the firm isn't shared by most employees, adding that they would investigate his claims.
Blankfein and Cohn, approaching their sixth anniversary in their current roles, are also contending with the departure of more than 50 partners in the past year, including eight members of the management committee.
Net income attributable to common shareholders, which includes the cost of preferred dividends, climbed to $2.07 billion from $908 million, or $1.56 per fully diluted share, a year earlier. Excluding a $1.64 billion one-time dividend paid to Warren Buffett's Berkshire Hathaway Inc., last year's first quarter net income for common shareholders was $2.55 billion, or $4.38 per share.