Goldman Sachs tops first-quarter estimates fueled by trading, investment banking

Goldman Sachs on Monday posted first-quarter profit and revenue that topped analysts’ expectations, fueled by a surge in trading and investment banking revenue.

Here’s what the company reported:

• Earnings: $11.58 per share, vs. $8.56 expected, according to LSEG
• Revenue: $14.21 billion, vs. expected $12.92 billion

The bank said profit jumped 28% to $4.13 billion, or $11.58 per share, from the year earlier period, thanks to a rebound in capital markets activities. Revenue rose 16% to $14.21 billion, topping analysts’ estimate by more than $1 billion.

Fixed income trading revenue rose 10% to $4.32 billion, topping the StreetAccount estimate by $680 million, thanks to a jump in mortgage, foreign exchange and credit trading and financing. Equities trading rose 10% to $3.31 billion, about $300 million more than expected, on derivatives activity.

Investment banking fees surged 32% to $2.08 billion, topping the estimate by roughly $300 million, driven by higher debt and equity underwriting.

Goldman Sachs CEO David Solomon has taken his lumps in the past year, but a turnaround appears to be underway as memories of the moribund capital markets and missteps tied to Solomon’s ill-fated push into retail banking begin to fade.

Like rivals JPMorgan Chase and Citigroup, which each posted better-than-expected trading and investment banking results in the quarter; Goldman took advantage of improving conditions since the start of the year.

Unlike more diversified rivals, Goldman gets most of its revenue from Wall Street activities. That can lead to outsized returns during boom times and underperformance when markets don’t cooperate.

After pivoting away from retail banking, Goldman’s new emphasis for growth has centered on its asset and wealth management division.

But that was the only Goldman business that didn’t top expectations for the quarter: Revenue in the business rose 18% to $3.79 billion, essentially matching the StreetAccount estimate, on higher private banking and lending revenue, rising private equity stakes and climbing management fees.

Solomon may also field questions about the latest examples of an exodus in senior managers, including his global treasurer Philip Berlinski and Beth Hammack, co-head of the bank’s global financing group.

On Friday, JPMorgan, Citigroup and Wells Fargo each posted quarterly results that topped estimates.

This story is developing. Please check back for updates.