David Solomon, CEO, Goldman Sachs, speaking at the World Economic Forum in Davos, Switzerland, Jan. 23, 2020.
Adam Galacia | CNBC
Goldman Sachs on Wednesday blew past analysts’ expectations with record first-quarter net profits and revenues on strong performance from the firm’s equities traders and investment bankers.
Here are the numbers:
Earnings: $18.60 per share, vs. $10.22 per share expected by analysts polled by Refinitiv.
Revenue: $17.7 billion, vs. $12.6 billion expected.
Trading Revenue: Fixed Income: $3.89 billion, Equities: $3.69 billion
Investment Banking: $3.77 billion
Shares of the New York-based bank rose 2% following the release, which showed that Goldman’s first-quarter revenues more than doubled on a year-over-year basis.
Expectations for Goldman Sachs were running high amid favorable conditions for many of the Wall Street businesses that the firm operates.
Analysts expected revenue growth to be driven by surging investment banking fees, helped in part by the record first-quarter issuance of blank check companies known as SPACs. Trading desks may also post higher revenue than a year earlier, and buoyant markets bode well for asset management fees.
Of the six biggest U.S. banks, Goldman gets the biggest share of its revenue from Wall Street activities including trading and investment banking. For the past few years that has been a detriment to the firm, as retail banking fueled by cheap consumer deposits has driven the industry’s record profits.
That dynamic reversed during the coronavirus pandemic, when firms with sizeable consumer operations had to set aside tens of billions of dollars for anticipated loan losses, causing banks like Wells Fargo to post their first quarterly loss since the financial crisis.
Goldman shares have climbed 24% this year, roughly matching the gain of the KBW Bank Index.
This story is developing. Please check back for updates.
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