During the first quarter of 2014, investors were generally pessimistic about the prospects of Wall Street’s big investment banks and pushed down the shares of Goldman Sachs and
Goldman Sachs reported on Thursday that in the first quarter of 2014 it earned $1.95 billion, or $4.02 per share, easily beating expectations of $3.45 per share. Goldman’s stock rose by 2.5% in pre-market trading. At Morgan Stanley, first quarter earnings were up 49%. The investment bank posted income from continuing operations of $1.47 billion, or $0.72 per diluted share compared with income of $981 million, or $0.49 per diluted share, for the same period a year ago. Shares of Morgan Stanley increased by 3% in pre-market trading.
Not all the news on Wall Street, however, was good. Banks continue to confront a tough environment as regulators limit their risk-taking efforts and key areas like bond trading slump. Profits at Goldman Sachs were down 11% from the first quarter of 2013, when net income was $2.19 billion. Net revenues at Goldman Sachs were $9.33 billion and beat expectations, but they were down from the same first quarter period a year ago, when the bank generated $10.09 billion of net revenue.
The key issue at Goldman continues to be the slowdown of its fixed-income trading machine, which the bank said generated less revenue because of “significantly lower net revenue in interest rate products, currencies and mortgages, as well as lower net revenues in credit products.” The bank did see some good results in its commodities trading and in total its fixed income, currency and commodities trading operation generated $2.85 billion in net revenue, which was down 11% from the first quarter of 2013.
