Today’s Economic Shakers

Goldman Sachs misses on earnings, stock dives in pre-market trading…

Goldman Sachs appears to be bucking the trend in the wrong direction, as the investment bank reported yesterday that it missed on Q-1 earnings.

While several of its competitors reported earnings that beat expectations, including Wells Fargo, Bank of America and and JPMorgan, GS reported Q-1 revenue of $8.32 billion with earnings of $5.15 per share, both missing analyst forecasts.

According to consensus expectations, GS was expected to report earnings of $5.33 per share with revenue predicted to come in at $8.32 billion.

The miss in GS’s revenue could at least be partially attributed to its lower-than-expected numbers from out of its trading division, which saw a drop of 2% compared to the same quarter for 2016.

However, the drop in revenue was seen pretty much across the board for the company, based on a comparison to 2016 Q-1, with the only significant exception coming from out of GS’s investment banking division.

Investment banking generated revenue of $1.7 billion for the quarter, which was a gain of 16% as compared to the same quarter the previous year.

The combined revenue of fixed income, commodities and currencies, often an area that Goldman Sachs excels at, saw a steep decline for the quarter, generating a 1% gain for the Q-1 2017 which was a decrease of 16% compared to Q-4 2016.

Investors weren’t particularly happy with Goldman Sachs earnings report, sending the stock price down by more than 3% in pre-market trading.

With Goldman Sachs being heavily weighted in the Dow Jones Industrial Index, that projects out to a drop of around 50 points in the Blue-chip index.

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Netflix falls in after-hours trading in response to missed subscriber growth…

Netflix reported a mixed bag of numbers in yesterday’s earnings report, but as far as investors were concerned, the bad seemed to outweigh the good.

The key focus for Wall Street seemed to be that Netflix missed its Q-1 U.S. subscriber growth numbers, with the streaming giant reporting that it had increased the amount of new users by 1.42 million. That was below analyst expectations of 1.59 million.

The international numbers also missed the mark of industry forecasters, as Q-1 growth outside the U.S. was reported at 3.53 million, off projections of 3.9 million.

However, on the positive side, the company’s own forecasts for the next quarter were somewhat brighter, with Netflix expecting Q-2 domestic growth to be about 600,000, which beat analyst forecasts of 420,000.

The forward guidance for international projections also beat Wall Street’s consensus predictions, with Netflix expecting subscriber growth around 2.6 million vs analyst forecasts of 2.1 million.

The bottom-line numbers for Netflix were a beat in the company’s favor, as Q-1 revenue came in at $2.64 billion as compared to analyst forecasts of $2.65 billion. Revenue was up 35% as compared to the same quarter for 2016.

Earnings per share also was a beat for Netflix, coming in at $0.40 per share vs expectations of $0.37.

In the follow-up call to the Q-1 earnings report, the company said that delays in some of its premium content, such as the hit series House of Cards, contributed to the decline of new subscribers for the quarter.

Additionally, the cost of content creation was reported to be less than had been expected, which can be seen as something of a surprise considering the pitched battle between competition such as Amazon in generating new shows.