Goldman's earnings are out and at revenues of $9.95 billion and EPS of $3.92 (compared to expectations of $9.41 billion and EPS $3.55), coupled with an increase in the dividend from $0.35 to $0.46 per share (exp. $0.40), the company appears to have done solidly better than expected. And yet, not all was sunny skies. As expected, declining secular markets continue to impact the company, whose ongoing secular decline is shown on the chart below. The reason - volume, which continues to slide for reasons already discussed extensively. To wit: "Net revenues in Investment Banking were $1.15 billion, 9% lower than the first quarter of 2011 and 35% higher than the fourth quarter of 2011....Net revenues in equity underwriting were significantly lower than the first quarter of 2011, primarily reflecting a decline in industry-wide activity. Net revenues in debt underwriting were lower compared with a strong first quarter of 2011, primarily reflecting a decline in leveraged finance activity." Thank god for CDS (aka derivatives): "Net revenues in Fixed Income, Currency and Commodities Client Execution were $3.46 billion, 20% lower than a solid first quarter of 2011, as higher net revenues in interest rate products were more than offset by lower net revenues in the other major businesses....Net revenues in Equities were $2.25 billion, 3% lower than the first quarter of 2011, as higher net revenues in equities client execution, reflecting an increase in derivatives, were more than offset by lower commissions and fees, consistent with lower market volumes." DVA loss for Q1 was $225 million. Finally, on the revenue side, hurray for Goldman Prop, aka the Asymmetric Information Initiative, aka "Investing and Lending" which generated $1.911 billion in revenues in Q1, the highest since Q1 2011. Still, the 22% top-line decline from Q1 2010 appears relentless. As for the only thing that matters to Goldman employees, implied full year comp dropped to $350,864 per average employee, the lowest in two years, even as the firm cut headcount from 33,300 to 32,400 in the quarter, the lowest number of employees since Q4 2009.
Summarizing the above: revenue breakdown.
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And comp:
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