(Reuters) – Goldman Sachs Group Inc offered new tidbits about its sweeping operational overhaul when reporting first-quarter results on Monday, but investors focused on revenue declines across nearly all its main businesses, sending shares lower.
Goldman, the fifth-largest U.S. bank by assets, was once considered a black box of profits, disclosing little about management's goals or how its core units functioned. Investors and analysts generally accepted that secrecy, since Goldman routinely generated higher returns than peers.
Goldman's shares fell 2.6 percent in early trading to $202.30.
The executives described Goldman's performance as relatively strong during a quarter where markets were tame and businesses were hurt by exogenous factors, like the U.S. government shutdown.
"We think this is the right time period and the right approach for us to execute flawlessly," he added.
During the first quarter, Goldman's annualized return-on-equity hit 11.1 percent. The metric is important to investors because it shows how well a bank can wring profits from shareholder capital. At its peak, Goldman was generating returns well above 30 percent, but more recently investors have hoped for returns of 15 percent to 20 percent.
Total revenue of $8.81 billion missed Wall Street's $8.99 billion estimate. The biggest drop came from Goldman's trading business, which was hurt by lower market volatility and the impact of the U.S. government shutdown.
One bright spot was Goldman's financial advisory business, where revenue soared 51 percent on higher deal volumes. But the backlog of deals declined, indicating that revenue in future quarters may be subdued.