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April 16 2015, 10.00am GMT


Compared to a decline of 7.1% in net income registered in the final quarter of last year, will Goldman Sachs impress in their first quarter earnings report?

On Thursday, Goldman Sachs Group Inc. (NYSE:GS) is expected to report first quarter earnings before the market opens. While the investment bank did post a net income decline of 7.1 percent in the final quarter of 2014, Goldman still managed to post a 5.4% net earnings increase over the entire year. This is positive given the tough banking environment we have seen in the last few years.

Added to this, in the last quarter, Goldman Sachs reported a 29% decline in revenue. This came as a result of bond market inactivity. While investors are anxiously waiting for the U.S. Federal Reserve to provide a clear indication of interest rate hikes, once this happens, volatility in the market will increase especially in the debt market.

Anticipating the release of the first quarter earnings report, the widespread consensus is that Goldman Sachs will report earnings per share (EPS) of $4.25. This is slightly down from the fourth quarter EPS in 2014 which came in above expectations at $4.61. Also, revenue is expected to come in at $9.31 billion for the first quarter compared to revenue of $7.68 billion in the 4th quarter.

In January 2016, Goldman Sachs is expected to report full year numbers. Expectations are for earnings per share of $17.16 on revenue of $34.38 billion. This translates into a small revenue increase as well as a 1.9 percent increase in EPS.

Interestingly, investment banks are bullish on Goldman Sachs and out of the thirty two ratings, 19 are holds, 10 are buys while 3 are sells. Also, the average target price is at $198.87 which is only 1.7 percent higher than the current share price.

MT4 Chart: Goldman Sachs

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