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Key Takeaways
- Goldman Sachs stock jumped in intraday trading Monday on a first-quarter earnings report that came in well above analyst estimates.
- Revenue, net income, and earnings per share were all above expectations, but like other banks that reported earnings last week, net interest income fell from last year.
- Goldman is the latest big lender to report earnings after JPMorgan, Citigroup, and Wells Fargo kicked off a stretch of bank earnings on Friday.
Shares of Wall Street banking giant Goldman Sachs (GS) surged more than 4% in intraday trading Monday following the release of a first-quarter earnings report that handily beat analyst expectations on the back of booming investment banking revenue.
Goldman posted $14.21 billion in total revenue for the quarter, along with $4.13 billion in net income, or $11.58 per share. Each of those figures came in well above analyst estimates compiled by Visible Alpha of $12.92 billion in revenue, $3.1 billion in income, and $8.49 in earnings per share (EPS).
Goldman recorded significant year-over-year increases in a number of revenue streams, including debt and equity underwriting increases of 38% and 45%, respectively, along with a 32% increase in investment banking fees to $2.08 billion during the first three months of 2024 from $1.58 billion in the first quarter of 2023.
Similar to other big banks like JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC), which all beat estimates when they posted earnings Friday, Goldman’s revenue and income surpassed estimates. Like them, the Wall Street powerhouse lagged forecasts on its net interest income, which at $1.61 billion was below analysts’ estimates of $1.76 billion, and about 10% below the $1.78 billion Goldman reported in the year-ago period.
Still, the investment bank is less focused on Main Street lending than the big banks that reported results Friday; Goldman Chief Executive Officer (CEO) David Solomon has pulled back from a push into retail banking to refocus on its traditional investment banking and trading operations.
Another quarterly dividend of $2.75 per share was approved by Goldman’s board, and is set to be paid out June 27 to shareholders of record on May 30. Goldman bought back about $1.5 billion of its own stock in the first quarter, but did not include details on when it will buy back more in Monday’s earnings report.
Goldman had ended down 2% Friday, along with a number of other bank stocks, as executives expressed caution about the future of the U.S. economy and as net interest income slid. Goldman shares were up 4.2% to $405.07 as of 10:16 a.m. ET Monday and up almost 20% in the past year.