Trading revenue dropped 37 percent to $3.44 billion. Excluding accounting adjustments, fixed-income brought in $1.7 billion and equity trading an additional $1.79 billion. Six analysts surveyed by Bloomberg called for $1.58 billion and $1.84 billion, respectively. The sales-and-trading division is overseen by Isabelle Ealet, Pablo Salame and Ashok Varadhan.
Revenue from investment banking -- run by Richard Gnodde, David Solomon and John Waldron -- declined 23 percent to $1.46 billion, beating the $1.36 billion estimate. Some senior executives were anticipating a drop of roughly 25 percent in that business, two people with knowledge of the figures said in March.
Debt underwriting revenue of $509 million beat the $380 million estimate of analysts surveyed by Bloomberg, spurred by strength in investment-grade debt sales. Advisory revenue of $771 million and equity-underwriting revenue of $183 million missed estimates.
Blankfein, 61, and President Gary Cohn, 55, have defended the bank’s business model, writing in their annual letter to shareholders that the firm will continue to wait out the downturn in fixed-income markets without making large-scale changes.
“It is important to remember that cycles do turn, even if the timing of such inflections may be difficult to predict,” they wrote on April 8. “It certainly feels like the cycle has been prolonged, particularly as interest rates in many parts of the world remain at -- or even below -- zero, and growth and deflation concerns, among other worries, have persisted.”
Goldman Sachs is the last of the largest U.S. banks to report results. Morgan Stanley beat profit estimates on Monday, countering a drop in revenue from fixed-income and equities trading by cutting costs. The firm followed JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. in lowering expenses to compensate.