Goldman Sachs (GS) Q1 Earnings Crushed Expectations

The history of Goldman Sachs Group Inc (NYSE:GS) dates back to 1869 when German immigrant Marcus Goldman started a commercial paper trading business in New York. His firm was initially engaged in offering short-term capital to smaller businesses to help them manage their expenses. Goldman Sachs was one of the first firms to provide paper financing to enterprises.

The company joined the New York Stock Exchange in 1896. Around the same time, it started collaborating with financial firms in major markets to offer a range of services such as foreign exchange and gold shipments. Goldman Sachs gradually established itself as a leader in the financial market through expansion and acquisitions. Today, it offers a range of financial services to individuals, businesses, financial institutions, and the government.

Goldman recently reported its financial results for the first quarter well above expectations. The fifth-biggest U.S. bank reported earnings of $6.71 billion, or $18.60 per share for the three months ended March 31, significantly higher than $1.12 billion, or $3.11 per share in the comparable period of 2020. Analysts on average were expecting Goldman to report earnings of $10.22 per share.

Revenue climbed by more than two folds to $17.70, crushing the consensus forecast of $12.56 billion. Meanwhile, net interest income in the quarter rose 12.9 percent to $1.48 billion, above analysts’ average estimate of $1.34 billion.

If we look at the performance of key segments, revenue at the investment banking segment jumped 73 percent to $3.77 billion, while global markets revenue jumped 47 percent to $7.58 billion. Comparatively, revenue at the consumer and wealth management segment rose 16 percent to $1.74 billion, whereas wealth management revenue increased 13 percent to $1.37 billion.

Speaking on the results, CEO David Solomon said in a statement, “We have been working hard alongside our clients in preparation for a world beyond the pandemic and a more stable economic environment. Our businesses remain very well positioned to help our clients reposition for the recovery, and that strength is reflected in the record revenues and earnings achieved this quarter. I am proud of our people for the performance they’ve delivered for clients over the past year under challenging conditions, and pleased that our client-centric strategy continues to drive additional value for our shareholders.”

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