Goldman Sachs Group (GS) posted stronger-than-expected first quarter earnings Monday as a rebound in merger deals supported revenue gains for its biggest division, sending the investment bank's shares higher in early trading.
Goldman, the fifth-largest U.S. bank and one of the most influential investment houses on Wall Street, reported earnings of $4.13 billion, or $11.58 a share, a 31.7% increase from the same period last year that was also well ahead of the Wall Street consensus forecast of $8.56 per share.
Group revenues rose 16.3% to $14.21 billion, topping analysts' forecasts of a $12.92 billion total, the bank said. The group's Global Banking & Markets division, which includes fixed-income trading as well as its mergers-and-acquisitions units, saw revenue rise 15% to $9.73 billion.
Global M&A activity rebounded firmly over the first quarter, with overall deal volumes rising 30% from a year earlier to just over $755 billion, according to LSEG data.
“Our first quarter results reflect the strength of our world-class and interconnected franchises and the earnings power of Goldman Sachs," said CEO David Solomon. "We continue to execute on our strategy, focusing on our core strengths to serve our clients and deliver for our shareholders.”
More Wall Street Analysts:
- Analyst unveils new Nike price target ahead of big summer for sports
- Analysts weigh in on Google-parent Alphabet’s stock after cloud event
- Analysts revamp Disney stock price target after proxy fight
Goldman Sachs shares were marked 5.4% higher in early Monday trading immediately following the earnings release to change hands at $411.11 each, a move would nudge the bank into positive territory for the year.
Last week, JP Morgan Chase (JPM) posted stronger-than-expected first quarter earnings but noted a quarter-on-quarter decline in one of its key profit metrics.
The bank said net interest income rose 11% to $23.2 billion, thanks in part to the higher interest rate environment and a pullback in bets that the Federal Reserve will begin cutting rates later this spring.
Related: JP Morgan shares tumble as key Q1 earnings metric disappoints Wall Street
JP Morgan did note, however, that net interest income was down 4% on a sequential basis, thanks to what it called "margin compression and lower deposit balances." But the bank estimated it would rise to just under $90 billion for the year, a tally that will likely top its overall expenses target.
Related: Veteran fund manager picks favorite stocks for 2024
