Goldman Sachs Shares Slip on Declining Earnings

Loan division losses and lower investment banking demand drive disappointing results

The Goldman Sachs logo is seen at the New York Stock Exchange

Michael M. Santiago / Staff / Getty Images

Key Takeaways

  • Goldman Sachs (GS) reported year-over-year declines in revenue and earnings per share.
  • Losses in the consumer loan division and lower demand for investment banking dragged down the results.
  • Management said that Goldman will scale back its consumer banking services.

Goldman Sachs (GS) shares slipped close to 2% after reporting declining earnings stemming from losses in its consumer loans division as well as lower demand for investment banking.

Goldman Sachs' revenue fell to $12.22 billion, down from $12.93 billion a year ago and lower than the projections of $12.8 billion. Goldman Sachs earnings dropped to $8.79 per share, down from $10.76 a share a year ago, but ahead of estimates of $8.34 per share that analysts forecasted for the first quarter.

Management of the New York-based bank has said that it will scale back on consumer banking services like loans, checking accounts and credit cards. Goldman said that it sold a portion of its Marcus consumer loans portfolio, taking a revenue hit of $470 million. It's also seeking to sell GreenSky, another lender it purchased nearly a year ago.

With deals drying up, revenue from investment banking was down 26%, showing a steep drop in one of Goldman's primary businesses. Advisory fees were down 27%, while revenue from fixed-income trading was also lower. Goldman Sachs did improve revenue in its assets and wealth management business.

Shares of Goldman Sachs are up 3.9% over the past 12 months and down 2.7% so far this year.

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