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Buffett's Goldman Sachs Tumbles on Weak 1st-Quarter Revenue

- By James Li

Goldman Sachs Group Inc. (GS), a major Warren Buffett (Trades, Portfolio) bank holding, said net revenues for first-quarter 2019 sank 13% year over year, driven by lower net revenues in key business segments.


The New York-based investment bank reported net earnings of $5.71 per share, down 33 cents from the prior quarter and $1.24 from the prior-year quarter.

Bank reports lower revenue across key segments like investment banking

Goldman reported investment banking segment revenues of $1.81 billion, down 11% from the prior quarter, driven by a 24% decline in underwriting revenues and lower backlog.

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Underwriting revenues declined primarily due to a "significant decline" in industry-wide initial public offerings and lower net revenues from leveraged finance transactions.

Stock sends the Dow lower

Shares of Goldman declined approximately 3.32% Monday morning, contributing to an 80-point nosedive in the Dow Jones Industrial Average.

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GuruFocus ranks Goldman's financial strength and profitability 4 out of 10 on a few severe warning signs, which include increasing long-term debt over the past three years and a three-year revenue growth rate that underperforms 55.5% of global competitors.

Buffett's Berkshire Hathaway Inc. (BRK-A)(BRK-B) owns 18,353,635 shares of Goldman as of the latest portfolio date. Other gurus with large holdings in Goldman include Dodge & Cox and Spiros Segalas (Trades, Portfolio).

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Disclosure: No positions.

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This article first appeared on GuruFocus.