Goldman Sachs on Monday Posted First-quarter profit and revenue beat analysts' expectations, driven by an increase in trading and investment banking revenue.
Here's what the company reported:
- Earnings: $11.58 per share versus expected $8.56, in line with LSEG
- Revenue: $14.21 billion vs. expected $12.92 billion
The bank said profit rose 28% to $4.13 billion, or $11.58 per share, from the identical period last yr, driven by a rebound in capital markets activity. Revenue rose 16% to $14.21 billion, beating analysts' estimates by greater than $1 billion.
Goldman shares rose about 3% on Monday.
Fixed income trading revenue rose 10% to $4.32 billion, topping StreetAccount's estimate by $680 million, reflecting a rise in mortgage, foreign exchange and credit trading and financing is attributable. Stock trading rose 10% to $3.31 billion, about $300 million greater than expected, on derivatives activity.
Investment banking fees rose 32% to $2.08 billion, topping estimates by about $300 million, driven by higher loan and equity underwriting.
Goldman's results are expected to be the perfect of the most important banks this quarter. Wells Fargo banking analyst Mike Mayo said in a research note on Monday.
Goldman CEO David Solomon has been through so much previously yr, but a turnaround appears to be underway as memories of struggling capital markets and the missteps surrounding Solomon's ill-fated foray into retail banking begin to fade.
Like rivals JPMorgan Chase And Citigroupwhich each reported better-than-expected trading and investment banking results for the primary quarter, Goldman benefited from improved conditions because the start of the yr.
“I have already said that historically low levels of activity will not last forever,” Solomon told analysts on a conference call Monday. “CEOs must make strategic decisions for their companies, companies of all sizes must raise capital, and financial sponsors must execute transactions to generate returns for their investors…It is clear that we are in the early stages of a reopening capital markets.”
Unlike more diversified competitors, Goldman derives the vast majority of its revenue from Wall Street activities. This can result in inflated returns during boom times and underperformance during times when markets should not cooperating.
After moving away from retail banking, Goldman's latest growth focus was on its wealth management division.
But that was the one Goldman business that didn't beat expectations for the quarter: The business's revenue rose 18% to $3.79 billion, essentially in step with StreetAccount's estimate, reflecting higher private revenue -Banking and lending business, increasing private equity investments and higher management is as a consequence of fees.
Revenue on the bank's smallest division, Platform Solutions, rose 24% to $698 million, beating estimates by about $120 million, driven by an increase in bank card and deposit balances.
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