Goldman's First-Quarter Earnings Fall Vs. Year-Ago but Top Views

Goldman Sachs (GS Quote) reported first-quarter profits Tuesday, sharply lower than what it earned in the year-ago period.

The broker said it earned 98 cents a share against the $1.40 it made in the first quarter last year. Analysts had expected it to earn 89 cents a share, according to Thomson Financial/First Call. (The difficulty of predicting broker earnings almost always leaves analyst estimates far off the mark.) Revenue fell 24% from $4.7 billion to $3.6 billion.

Equity trading revenue took the biggest hit -- at $105 million they were down 91% from last year's first quarter. That included "the negative effect of a single block trade," said the firm. In other words, somebody blew a trade big time.

The firm took another hit from the slow pace of mergers and acquisitions -- financial advisory revenues slipped 37% to $457 billion. But underwriting was a bright spot, showing a 5% gain over the year-ago quarter.

Goldman said that it cut employment by 2% in the quarter and that it expects "to reduce employment levels modestly" through the year. Lately the chatter had been that the firm would put through more than a modest trimming, with rumors that it would cut back heavily on investment banking.

Goldman shares were up $1.05 to $90.25 in premarket trading on Instinet. For the year they are down 3.8%, but have lately rallied on hopes that, with a firming economy, equity offering and M&A activity will pick up.