Goldman Sachs on Monday posted first-quarter profit that beat analysts’ expectations as the bank reined in compensation, while companywide revenue missed on tougher market conditions for two of the firm’s main divisions.
The bank generated $2.25 billion of profit in the period, or $5.71 a share, compared with the $4.89 estimate, the New York-based firm said in a release. Revenue dropped 13% to $8.81 billion on lower results in the bank’s Wall Street trading and investing and lending segment, below analyst’s $8.9 billion estimate. Shares fell 1.7 percent in premarket trading.
“We are pleased with our performance in the first quarter, especially in the context of a muted start to the year,” Goldman CEO David Solomon said in the release. “Our core businesses generated solid results driven by our strong franchise positions. We are focused on new opportunities to grow and diversify our business mix and serve a broader range of clients globally.”
Considering the impact that tough trading conditions had on revenue, Goldman pulled a lever at its disposal: It lowered compensation for its employees. The bank booked $3.26 billion in pay and benefits for the quarter, 20% less than a year ago and well below the $3.58 billion estimate. The firm also trimmed headcount by 2% from the fourth quarter.