Goldman Sachs Group (GS) posted stronger-than-expected first quarter earnings Thursday as global markets revenues offset a slump in deal-making fees amid sharp decline in merger activity.
Goldman said earnings for the three months ending in March were pegged at $10.76 per share, down 42.1% from the same period last year but firmly ahead the Street consensus forecast of $8.95 per share. Group revenues, Goldman said, fell 27% to $12.93 billion, but again topped analysts' forecasts of an $11.9 billion total.
Investment banking revenues fell 36% from last year to $2.41 billion, Goldman said, while overall global markets revenues were up 4% at $7.87 billion.
“It was a turbulent quarter dominated by the devastating invasion of Ukraine. The rapidly evolving market environment had a significant effect on client activity as risk intermediation came to the fore and equity issuance came to a near standstill," said CEO David Solomon.
"Despite the environment, our results in the quarter show we continued to effectively support our clients and I am encouraged that our more resilient and diversified franchise can generate solid returns in uncertain markets,” he added.
Goldman Sachs shares were marked 1.6% higher in early Thursday trading immediately following the earnings release to change hands at $326.80 each.
Goldman's earnings followed a miss from its larger rival, JPMorgan Chase (JPM) yesterday, as the country's biggest bank set aside nearly $1 billion to cover potential losses linked to surging inflation and the war in Ukraine.
CEO Jamie Dimon cautioned earlier this month that the impact of the Russia-Ukraine conflict on the bank's profits, while also warning that rate hikes from the Federal Reserve "could be significantly higher than the market expects' between now and the end of the year.
Global merger activity fell more than 20% from last year's SPAC-fueled first quarter frenzy, data from Refinitiv indicated earlier this month, with the total value of transactions pegged at around $1 trillion, highlighted by Microsoft's (MSFT) $69 acquisition of video game maker Activision Blizzard (ATVI).
